Inflammation can be prevented in most inflammatory brain diseases, while tissue repair of the lesioned central nervous system (CNS) is still a major challenge. The CNS is difficult to access for protein therapeutics due to the blood-brain barrier. Here, we show that genetically engineered embryonic stem cell-derived microglia (ESdM) are a suitable therapeutic vehicle for neurotrophin-3 (NT3) in experimental autoimmune encephalomyelitis (EAE). The intravenously transplanted ESdM migrated into the inflammatory CNS lesions and engrafted there as microglial cells. EAE afflicted mice treated with ESdM that were genetically modified to express NT3 showed stable recovery from disease symptoms. The NT3-transduced ESdM created an anti-inflammatory cytokine milieu in the spinal cord and promoted neuronal sprouting. Furthermore, mice treated with NT3-transduced ESdM showed less axonal injury and reduced demyelination. Thus, genetically modified ESdM represent a suitable tool to introduce therapeutic neuroprotective and repair-promoting proteins into the CNS in neuroinflammatory diseases.