Acellular basal lamina grafts have been shown to be less immunogenic in comparison to cellular grafts, but possess a limited potential for supporting axonal regeneration through them. The present study describes the effect of cultured Schwann cells on enhancing regeneration through acellular grafts. 2 cm long acellular grafts, and in vitro Schwann cell populated acellular grafts were used to repair a surgically created gap in the host peroneal nerve. The transplants were analyzed at 1, 2, 4 and 8 weeks to determine their ability to support axonal regeneration. Host axonal regeneration through Schwann cell cocultured acellular grafts occurred rapidly and was significantly better as compared to non-cultured acellular grafts. The results demonstrate a beneficial effect of Schwann cell culture pretreatment on regeneration through acellular grafts and an improved recovery of the target muscle. The procedure of first preparing acellular grafts with subsequent coculture with Schwann cells offers a novel approach for the repair of injured nervous tissue.