Injured axons in mammalian peripheral nerves often regenerate successfully over long distances, in contrast to axons in the brain and spinal cord (CNS). Neurite growth-inhibitory proteins, including the recently cloned membrane protein Nogo-A, are enriched in the CNS, in particular in myelin. Nogo-A is not detectable in peripheral nerve myelin. Using regulated transgenic expression of Nogo-A in peripheral nerve Schwann cells, we show that axonal regeneration and functional recovery are impaired after a sciatic nerve crush. Nogo-A thus overrides the growth-permissive and -promoting effects of the lesioned peripheral nerve, demonstrating its in vivo potency as an inhibitor of axonal regeneration.