Clinical recovery after a lesion of the central nervous system (CNS) can be attributed to mechanisms of functional compensation, neural plasticity, and/or repair. The relative impact of each of these mechanisms after a human spinal cord injury (SCI) has been explored in a prospective European multi-center study in 460 acute traumatic SCI subjects. Functional (activities of daily living and ambulatory capacity), neurological (sensory-motor deficits), and spinal conductivity (motor- and somato-sensory evoked potentials) measures were repeatedly followed over 12 months. In accordance with previous studies, complete SCI subjects (cSCI; n = 217) improved in activities of daily living unrelated to changes of the neurological condition, while incomplete SCI subjects (iSCI; n = 243) showed a greater functional and neurological recovery. The functional recovery in iSCI subjects was not related to an improvement of spinal conductivity, as reflected in unchanged latencies of the evoked potentials. This is in line with animal studies, where spinal conductivity of damaged spinal tracts has been reported to remain unchanged. These findings support the assumption that functional recovery occurs by compensation, especially in cSCI and by neural plasticity leading to a greater improvement in iSCI. Relevant repair of damaged spinal pathways does not take place.