Scientists have reversed paralysis in dogs after injecting them with cells grown from the lining of their nose.
The pets had all suffered spinal injuries which prevented them from using their back legs.
The Cambridge University team is cautiously optimistic the technique could eventually have a role in the treatment of human patients.
The study is the first to test the transplant in "real-life" injuries rather than laboratory animals.
In the study, funded by the Medical Research Council and published in the neurology journal Brain, the dogs had olfactory ensheathing cells from the lining of their nose removed.
These were grown and expanded for several weeks in the laboratory.
Of 34 pet dogs on the proof of concept trial, 23 had the cells transplanted into the injury site - the rest were injected with a neutral fluid.
Many of the dogs that received the transplant showed considerable improvement and were able to walk on a treadmill with the support of a harness.
None of the control group regained use of its back legs.
The research was a collaboration between the MRC's Regenerative Medicine Centre and Cambridge University's Veterinary School.
Professor Robin Franklin, a regeneration biologist at the Wellcome Trust-MRC Stem Cell Institute and report co-author, said: 'Our findings are extremely exciting because they show for the first time that transplanting these types of cell into a severely damaged spinal cord can bring about significant improvement.
"We're confident that the technique might be able to restore at least a small amount of movement in human patients with spinal cord injuries but that's a long way from saying they might be able to regain all lost function. '
Prof Franklin said the procedure might be used alongside drug treatments to promote nerve fibre regeneration and bioengineering to substitute damaged neural networks.
The researchers say the transplanted cells regenerated nerve fibres across the damaged region of the spinal cord. This enabled the dogs to regain the use of their back legs and coordinate movement with their front limbs.
The new nerve connections did not occur over the long distances required to connect the brain to the spinal cord. The MRC scientists say in humans this would be vital for spinal injury patients who had lost sexual function and bowel and bladder control.
Prof Geoffrey Raisman, chair of Neural Regeneration at University College London, who discovered olfactory ensheathing cells in 1985 said: "This is not a cure for spinal cord injury in humans - that could still be a long way off. But this is the most encouraging advance for some years and is a significant step on the road towards it."
He said the clinical benefits were still limited: "This procedure has enabled an injured dog to step with its hind legs, but the much harder range of higher functions lost in spinal cord injury - hand function, bladder function, temperature regulation, for example - are yet more complicated and still a long way away."
Jasper, a 10-year-old dachshund, is one of the dogs which took part in the trial.
His owner May Hay told me: "Before the treatment we used to have to wheel Jasper round on a trolley because his back legs were useless. Now he whizzes around the house and garden and is able to keep up with the other dogs. It's wonderful."
Jasper can be seen in the video at the top of the page before and after his treatment.