Spinal cord injury (SCI) is characterized by severe tissue damage and extreme inflammation involving prolonged invasion of inflammatory cells. Following SCI, there is long-term disability and treatment is limited. We previously demonstrated that sustained subdural infusion of the anti-inflammatory protein, Serp-1, significantly improved functional recovery and reduced inflammatory cell invasion following SCI. We hypothesized that sustained delivery of immune-modulating Serp-1 using a chitosan-collagen hydrogel would demonstrate therapeutic benefits and reduce damage following forceps crush-induced SCI. Following the dorsal column crush injury, we observed that for rats treated with high-dose (100 μg/50 μL) Serp-1, functional motor improvement was observed. There was also a more pronounced neuroprotective effect in comparison to the low-dose (10 μg/50 μL) treatment, which was likely attributable to suppression of local inflammation. Conversely, sustained infusion of low-dose Serp-1 CCH did not enhance recovery. Thus, sustained delivery of immune-modulating Serp-1 through a chitosan-collagen hydrogel exhibits neuroprotective potential following acute SCI.