Postprostatectomy erectile dysfunction (ED) is the major problem for patients with clinically localized prostate cancer. Recently, gene and stem cell-based therapy of the corpus cavernosum has been attempted for postprostatectomy ED, but those therapies are limited by rapid blood flow and disruption of the normal architecture of the corpus cavernosum. In this study, we attempted to regenerate the damaged cavernous nerve (CN), which is the main cause of ED. We investigated the effectiveness of human adipose-derived stem cell (hADSC) and nerve growth factor-incorporated hyaluronic acid-based hydrogel (NGF-hydrogel) application on the CN in a rat model of bilateral cavernous nerve crush injury. Four weeks after the operation, erectile function was assessed by detecting the intracavernous pressure (ICP)/arterial pressure level by CN electrostimulation. The ICP was significantly increased by application of hADSC with NGF-hydrogel compared to the other experimental groups. CN and penile tissue were collected for histological examination. PKH-26 labeled hADSC colocalized with beta III tubulin were shown in CN tissue sections. hADSC/NGF-hydrogel treatment prevented smooth muscle atrophy in the corpus cavernosum. In addition, the hADSC/NGF-hydrogel group showed increased endothelial nitric oxide synthase protein expression. This study suggests that application of hADSCs with NGF-hydrogel on the CN might be a promising treatment for postprostatectomy ED.