Recovery following stroke involves neurogenesis and axonal remodeling within the ischemic brain. Gualou Guizhi decoction (GLGZD) is a Chinese traditional medicine used for the treatment of post-stroke limb spasm. GLGZD has been reported to have neuroprotective effects in cerebral ischemic injury. However, the effects of GLGZD on neurogenesis and axonal remodeling following cerebral ischemia remain unknown. In this study, a rat model of focal cerebral ischemia/reperfusion was established by middle cerebral artery occlusion. Neurological function was assessed immediately after reperfusion using Longa's 5-point scoring system. The rats were randomly divided into vehicle and GLGZD groups. Rats in the sham group were given sham operation. The rats in the GLGZD group were intragastrically administered GLGZD, once daily, for 14 consecutive days. The rats in the vehicle and sham groups were intragastrically administered distilled water. Modified neurological severity score test, balance beam test and foot fault test were used to assess motor functional changes. Nissl staining was performed to evaluate histopathological changes in the brain. Immunofluorescence staining was used to examine cell proliferation using the marker 5-bromo-2'-deoxyuridine (BrdU) as well as expression of the neural precursor marker doublecortin (DCX), the astrocyte marker glial fibrillary acidic protein (GFAP) and the axon regeneration marker growth associated protein-43 (GAP-43). GLGZD substantially mitigated pathological injury, increased the number of BrdU, DCX and GFAP-immunoreactive cells in the subventricular zone of the ischemic hemisphere, increased GAP-43 expression in the cortical peri-infarct region, and improved motor function. These findings suggest that GLGZD promotes neurological functional recovery by increasing cell proliferation, enhancing axonal regeneration, and increasing the numbers of neuronal precursors and astrocytes in the peri-infarct area.