The aim of this study was to investigate the effects of vascular endothelial growth factor (VEGF) on regeneration of the rat sciatic nerve in vivo. To that end we used 10-mm long cell-free nerve grafts to bridge a gap in the sciatic nerve. The grafts were pretreated with either VEGF (50, 100 or 250 ng/ml), nerve growth factor (NGF, 100 ng/ml) or laminin (100 ng/ml) before implantation. Outgrowth of axons, Schwann cells, blood vessels and macrophages were studied 10 days post-implantation by the use of immunocytochemistry and histochemistry. Grafts pretreated with VEGF stimulated the outgrowth of Schwann cells and blood vessels but not axons. In such grafts, the Schwann cells also exhibited a dramatic change in morphology and became filled with large lipid-containing vacuoles. These cells also showed an intense immunoreactivity for the VEGF receptor flk-1. Neither pretreatment with laminin nor NGF affected the outgrowth of Schwann cells. However, NGF treatment increased the number of axons in the graft but was not able to counteract injury-induced downregulation of substance P in the dorsal root ganglia. The results show that local application of VEGF promotes at least two events, invasion of Schwann cells and neovascularization, which are important during nerve regeneration. The findings suggest that the effects of the pretreatment by the growth factors is local and limited to the graft, whereas central events like neuropeptide synthesis is not affected.