The neural cell adhesion molecule (NCAM) plays a crucial role during development and regeneration of the nervous system, mediating neuronal differentiation, survival and plasticity. Moreover, NCAM regulates learning and memory. A peptide termed P2, corresponding to a 12-amino-acid sequence in the second immunoglobulin (Ig)-like module of NCAM, represents the natural cis-binding site for the first NCAM Ig module. The P2 peptide targets NCAM, thereby inducing a number of intracellular signaling events leading to the stimulation of neurite outgrowth and promotion of neuronal survival in vitro. The present study evaluated the effect of the P2 peptide on functional and histological outcomes following traumatic brain injury inflicted by a cortical cryogenic lesion. Lesioned rats were injected subcutaneously with P2 peptide, 5 mg/kg daily for 15 days beginning 2 h after injury. This treatment significantly improved postlesion recovery of motor and cognitive function, reduced neuronal degeneration, protected cells against oxidative stress, and increased reactive astrogliosis and neuronal plasticity in the sublesional area. P2 appeared rapidly in blood and cerebrospinal fluid after subcutaneous administration and remained detectable in blood for up to 5 h. The results suggest that P2 has therapeutic potential for the treatment of traumatic brain injury.