AbstractThe strategy of replacing a completely damaged spinal cord with allogenic adult spinal cord tissues (aSCs) can potentially repair complete spinal cord injury (SCI) in combination with immunosuppressive drugs, such as tacrolimus (Tac), which suppress transplant rejection and improve graft survival. However, daily systemic administration of immunosuppressive agents may cause harsh side effects. Herein, a localized, sustained Tac‐release collagen hydrogel (Col/Tac) was developed to maximize the immune regulatory efficacy but minimize the side effects of Tac after aSC transplantation in complete SCI recipients. Thoracic aSCs of rat donors were transplanted into the complete thoracic spinal cord transection rat recipients, after which Col/Tac hydrogel was implanted. The Tac‐encapsulated collagen hydrogel exhibited suitable mechanical properties and long‐term sustained Tac release behaviour. After Col/Tac hydrogel implantation in SCI rats with aSC transplantation, the recipients' survival rate significantly improved and the side effects on tissues were reduced compared with those with conventional Tac medication. Moreover, treatment with the Col/Tac hydrogel exhibited similarly reduced immune rejection levels by regulating immune responses and promoted neurogenesis compared to daily Tac injections, and thus improved functional restoration. Localized delivery of immunosuppressive agents by the Col/Tac hydrogel may be a promising strategy for overcoming immune rejection of transplants, with significant potential for clinical application in the future.