Zebrafish have a remarkable capacity to regenerate following spinal cord (SC) injury but the responsible cellular events are not well understood. We used in vivo imaging and genetics to pin-point specific cellular processes controlling SC regeneration in zebrafish. We identified two temporally and mechanistically distinct phases of cellular regeneration in the SC. The initial phase relies on migration of precursor neurons to the injury, enabling rapid functional recovery, and activation of quiescent neural progenitor cells (NPCs). A second phase of regenerative neurogenesis compensates for both the lost tissue and cells depleted due to precursor neuron migration. We propose a critical role of precursor neurons recruitment in initiating neuronal circuit recovery and buying sufficient time for regenerative neurogenesis to take place. Taken together, our data suggests an unanticipated role of precursor cell recruitment in driving neural repair and functional recovery during the regenerative response.