The digital currency fell near $3,330 in afternoon trading following the news before recovering the $4,000 level.
Coinbase had originally halted bitcoin cash trading as it waited for "sufficient liquidity" to reach the cryptocurrency.
Bitcoin cash fell from its session highs on Wednesday, briefly trading back below $4,000, after Coinbase-owned GDAX restarted trading in the bitcoin offshoot.
The digital currency fell near $3,330 in afternoon trading following the news, but had recovered to $4,184 as of 5:22 p.m., ET, up about 45 percent over the last 24 hours, according to Coinbase. Bitcoin itself fell about 8 percent to $16,130, the website data showed.
Coinbase said late Wednesday afternoon ET that it was allowing bitcoin cash buys and sells, although the service was paused as of publication.
The company had originally halted bitcoin cash trading as it waited for "sufficient liquidity" to reach the cryptocurrency.