In this study a tissue-engineered nerve conduit for repair of peripheral nerve defects was devised and characterized in vitro. To construct the nerve conduits, beagle sciatic nerves were acellularized with lysolecithin and seeded with neurons and Schwann cells, which were induced from rat hair follicle neural crest stem cells. The nerve constructs were cultured in vitro and characterized by multiple methods, including immnohistochemistry, electron microscopy, and electrophysiology at 1, 3, and 8 weeks. The same scaffolds injected with phosphate-buffered saline were used as control. We found that hair follicle neural crest stem cell-derived neurons could survive in the nerve constructs as long as 8 weeks, and the nerve constructs showed desirable electrophysiological features. This nerve construct could work as an alternative for the current standard autologous nerve transplantation, especially in peripheral nerves with large defects.