We present a model case study of the activity of aqueous extract of Hericium erinaceus fresh fruit bodies in promoting functional recovery following crush injury to the peroneal nerve in adult female Sprague-Dawley rats. The aim was to explore the possible use of this mushroom in nerve repair. The activities of aqueous extract were compared to activities exhibited by mecobalamin (vitamin B12), which has been widely used in the treatment of peripheral nerve disorders. Analysis of walking track indicated that return of hind limb function and normal toe spreading occurred earlier in treated groups than in the negative control (non-treated) group. Regeneration of axons and reinnervation of motor endplates/neuromuscular junction in extensor digitorum longus muscle of rats in treated groups developed better than in the negative control group. Further, immunofluorescence studies also showed that dorsal root ganglia neurons ipsilateral to the crush injury in rats of treated groups expressed higher immunoreactivities for Akt and MAPK signaling pathways as well as c-Jun and c-Fos genes compared to the negative control group. Akt cascade plays a major role in mediating neurotrophin-promoted cell survival, while MAPK cascade is involved in mediating neurite outgrowth. Immediate early gene expression was also involved in the cascade of events leading to regeneration. Local axonal protein synthetic machinery was also enhanced in the distal segments of crushed nerves in treated groups. Therefore, daily oral administration of H. erinaceus could promote the regeneration of injured rat peroneal nerve in the early stage of recovery.