This paper presents functional regeneration of severed peripheral nerve using a polymer-based implantable electrical stimulator. A polyimide based conduit electrode was made by micro-fabrication and a stimulation chip was designed to generate biphasic current pulse for electrical stimulation. The stimulation chip was packaged with a battery using silicone elastomer, and integrated with the electrode. The implantable electrical stimulator was implanted in the rat sciatic nerve with 7 mm gap. The electrical stimulation was applied for periods of one, two and four weeks between the proximal and the distal nerve stumps. After four weeks of post-operations, the degree of regeneration was evaluated through walking track assessments and by measuring neural response of the regenerated nerve. Based on these results, electrical stimulation, especially for two weeks of stimulation, could accelerate functional regeneration of the severed nerve.