The peripheral nervous system has an intrinsic ability to regenerate after injury. However, this process is slow, incomplete, and often accompanied by disturbing motor and sensory consequences. Sciatic nerve injury (SNI), which is the most common model for studying peripheral nerve injury, is characterized by damage to both motor and sensory fibers. The main goal of this study is to examine the feasibility of administration of human muscle progenitor cells (hMPCs) overexpressing neurotrophic factor (NTF) genes, known to protect peripheral neurons and enhance axon regeneration and functional recovery, to ameliorate motoric and sensory deficits in SNI mouse model. To this end, hMPCs were isolated from a human muscle biopsy, and manipulated to ectopically express brain-derived neurotrophic factor (BDNF), glial-cell-line-derived neurotrophic factor (GDNF), vascular endothelial growth factor (VEGF), and insulin-like growth factor (IGF-1). These hMPC-NTF were transplanted into the gastrocnemius muscle of mice after SNI, and motor and sensory functions of the mice were assessed using the CatWalk XT system and the hot plate test. ELISA analysis showed that genetically manipulated hMPC-NTF express significant amounts of BDNF, GDNF, VEGF, or IGF-1. Transplantation of 3 × 106 hMPC-NTF was shown to improve motor function and gait pattern in mice following SNI surgery, as indicated by the CatWalk XT system 7 days post-surgery. Moreover, using the hot-plate test, performed 6 days after surgery, the treated mice showed less sensory deficits, indicating a palliative effect of the treatment. ELISA analysis following transplantation demonstrated increased NTF expression levels in the gastrocnemius muscle of the treated mice, reinforcing the hypothesis that the observed positive effect was due to the transplantation of the genetically manipulated hMPC-NTF. These results show that genetically modified hMPC can alleviate both motoric and sensory deficits of SNI. The use of hMPC-NTF demonstrates the feasibility of a treatment paradigm, which may lead to rapid, high-quality healing of damaged peripheral nerves due to administration of hMPC. Our approach suggests a possible clinical application for the treatment of peripheral nerve injury.