Increasing evidence has supported that transplantation of human stem cells induces neuroprotective and reparative effects in animal models of Parkinson's disease (PD). However, without systemic immunosuppressive therapy, most of these grafted cells are rejected by the hosts. Long term and systemic injection of cyclosporine-A (CsA) is required to maintain the survival of grafted cells. The purpose this study is to examine a new treatment strategy to suppress the immunorejection by locally co-grafting of polylactic/glycolic acid nanoparticles containing CsA (NanoCsA) with differentiated human induced pluripotent stem cells (iPSCs). In the in vitro media, NanoCsA provided sustained release of CsA for >6 weeks. The differentiated human iPSCs were co-grafted with NanoCsA or NanoVeh (nanoparticle without CsA) to the striatum of unilaterally 6-hydroxydopamine -lesioned rats. NanoCsA/iPSCs co-graft significantly improved locomotor activity compared to NanoVeh/iPSCs co-grafts or iPSC grafts + sytemic CsA at 1 month after transplantation. Brain tissues were collected for measurements of tyrosine hydroxylase (TH) and human marker Stem121 immunoreactivity. Cografting with NanoCsA/iPSCs, compared to NanoVeh/iPSCs, significantly increased TH and Stem121 immunoreactivity as well as tumor formation in the lesioned striatum. Taken together, our study supports that NanoCsA provides long-lasting CsA release and reduces immunorejection of human iPSCs xenograft in a 6-hydroxydopamine rat model of PD.