We have investigated expression of the axon growth-inhibitory proteoglycan NG2 in peripheral nerve. In the adult, NG2 was present on endoneurial and perineurial fibroblasts, but not on Schwann cells. At birth, peripheral nerve NG2 was heavily glycanated, but was much less so in the adult. In vitro, sciatic nerve fibroblasts also produced heavily glycanated NG2. After peripheral nerve injury in rats and humans, an accumulation of NG2-positive cells was observed at the injury site. In the rat, there was an increase in NG2 glycanation for at least 2 weeks following injury. In mixed cultures of Schwann cells and peripheral nerve fibroblasts, the axons preferred to grow on the Schwann cells and seldom crossed onto the fibroblasts. Three-dimensional cultures of sciatic nerve fibroblasts were inhibitory to the growth of dorsal root ganglion axons. Inhibition of proteoglycan synthesis made the cells more permissive. NG2 may play a part in blocking axon regeneration through scar tissue in injured human peripheral nerve.