While Wallerian Degeneration (WD) is a crucial pathological process induced with spinal cord injury (SCI), its underlying mechanisms is still understudied. In this study, we aim to assess structural alterations and clinical significance of WD in the cervical cord following SCI using multimodal MRI, which combines T2*-weighted imaging and diffusion tensor imaging (DTI). T2*-weighted images allow segmentation of anatomical structures and the detection of WD on macrostructural level. DTI, on the other hand, can identify the reduction in neuroaxonal integrity by measuring the diffusion of water molecules on the microstructural level. In this prospective study, 35 SCI patients (19 paraplegic and 16 tetraplegic patients) and 12 healthy controls were recruited between July 2020 and May 2022. The hyperintensity voxels in the dorsal column was manually labeled as WD on T2*-weighted images. The mean cross-sectional area (CSA) and mean DTI indexes of WD at the C2 level were calculated and compared between groups. Correlation analysis was used to determine the associations of the magnitude of WD with lesion characteristics and clinical outcomes. Compared with controls, SCI patients showed evident hyperintensity (35/35) and decreased neuroaxonal integrity (P < 0.05) within the dorsal column at the C2 level. A higher neurological level of injury was associated with a larger mean CSA and reduction in neuroaxonal integrity within WD (P < 0.05). Smaller total and dorsal tissue bridges were related to greater mean CSA and lower fractional anisotropy values in WD (P < 0.05), respectively. Moreover, SCI participants with significantly larger CSAs and significantly lower microstructural integrity had worse sensory outcomes (P < 0.05). This comprehensive evaluation of WD can help us better understand the mechanisms of WD, monitor progression, and assess the effectiveness of therapeutic interventions after SCI.