Spinal cord injury (SCI) is a devastating event that often results in the inflammatory condition of glial scar tissue formation, impeding neural regeneration and recovery. Reducing the inflammatory response and inhibiting glial formation are promising strategies for improving SCI outcomes. Here, we introduce a new role for Shinbaro2 (Sh2), known for its anti-inflammatory and pain-reducing effects, in ameliorating glial scars formed in the damaged spinal cord and promoting axon growth after SCI. Sh2 was applied at various concentrations to cultivate primary spinal cord neurons. Concentrations of 1 and 2 mg/mL effectively enhanced cell viability and axonal outgrowth in spinal cord neurons subjected to hydrogen peroxide or laceration injury. Sh2 helped reduce neuroinflammation by increasing anti-inflammatory M2 macrophages (arginase 1) and decreasing inflammatory cells, ultimately reducing lesion size. In scar formation, Sh2 inhibited the expression of β-catenin and nestin in reactive astrocytes in the injured spinal cord. Moreover, Sh2 suppressed the expression of chondroitin sulfate proteoglycans and SOX9, which are involved in scar formation. Furthermore, Sh2 promoted the sprouting of serotonergic axons and the growth of neurofibrillary tangles, enhancing motor function recovery in SCI. These findings highlight the potential of Sh2 as an SCI therapeutic intervention, offering hope for neural and functional restoration in individuals with this debilitating condition.