To study the cellular mechanism of vascular endothelial growth factor (VEGF)-enhanced neurogenesis in ischemic brain injury, we used middle cerebral artery occlusion (MCAO) model to induce transient focal ischemic brain injury. The results showed that ischemic injury significantly increased glial fibrillary acidic protein immunopositive (GFAP+) and nestin+ cells in ipsilateral striatum 3 days following MCAO. Most GFAP+ cells colocalized with nestin (GFAP+-nestin+), Pax6 (GFAP+-Pax6+), or Olig2 (GFAP+-Olig2+). VEGF further increased GFAP+-nestin+ and GFAP+-Pax6+ cells, and decreased GFAP+-Olig2+ cells. We used striatal injection of GFAP targeted enhanced green fluorescence protein (pGfa2-EGFP) vectors combined with multiple immunofluorescent staining to trace the neural fates of EGFP-expressing (GFP+) reactive astrocytes. The results showed that MCAO-induced striatal reactive astrocytes differentiated into neural stem cells (GFP+-nestin+ cells) at 3 days after MCAO, immature (GFP+-Tuj-1+ cells) at 1 week and mature neurons (GFP+-MAP-2+ or GFP+-NeuN+ cells) at 2 weeks. VEGF increased GFP+-NeuN+ and BrdU+-MAP-2+ newborn neurons after MCAO. Fluorocitrate, an astrocytic inhibitor, significantly decreased GFAP and nestin expression in ischemic brains, and also reduced VEGF-enhanced neurogenic effects. This study is the first time to report that VEGF-mediated increase of newly generated neurons is dependent on the presence of reactive astrocytes. The results also illustrate cellular mechanism of VEGF-enhanced neural repair and functional plasticity in the brains after ischemic injury. We concluded that neurogenic effect of VEGF is related to increase of striatal astrocytes transdifferentiation into new mature neurons, which should be very important for the reconstruction of neurovascular units/networks in non-neurogenic regions of the mammalian brain.