Neurotrophic factors play an important modulatory role in axonal sprouting during nerve regeneration involving the proliferation of hematogenous and Schwann cells in damaged tissue. We have exposed lesioned sciatic nerves to a collagen prosthesis with covalently bonded small cell adhesive peptides Arg-Gly-Asp-Ser (RGDS), Lys-Arg-Asp-Ser (KRDS), and Gly-His-Lys (GHK) to study local production of growth factors and cytokines in the regenerating tissues. Western/enzyme-linked immunosorbent assay (ELISA) studies were performed after 10 days of regeneration, when the tubular prosthesis is filled with fibrous matrix infiltrated by hematogenous cells and proliferating Schwann cells with growth factors produced locally. Regeneration was also analyzed by morphometrical methods after 30 days. The quantification of growth factors and proteins by ELISA revealed that there was an enhanced expression of the neurotrophic factors nerve growth factor (NGF) and neurotrophins (NT-3 and NT-4) in the regenerating tissues. This was further established by Western blot to qualitatively analyze the presence of the antigens in the regenerating tissues. Schwann cells were localized in the regenerating tissues using antibodies against S-100 protein. Other growth factors including growth-associated protein 43 (GAP-43), apolipoprotein E (Apo E), and pro-inflammatory cytokine like interleukin-1alpha (IL-1alpha) expression in the peptide groups were evaluated by ELISA and confirmed by Western blotting. Cell adhesive integrins in the proliferating cells were localized using integrin-alpha V. The combined results suggest that the early phase of regeneration of peripheral nerves in the presence of peptide-incorporated collagen tubes results in the enhanced production of trophic factors by the recruited hematogenous cells and Schwann cells, which in turn help in the secretion of certain vital trophic and tropic factors essential for early regeneration. Furthermore, hematogenous cells recruited within the first 10 days of regeneration help in the production of inflammatory mediators like interleukins that in turn stimulate Schwann cells to produce NGF for axonal growth.