We used morphological, immunohistochemical and functional assessments to determine the impact of genetically-modified peripheral nerve (PN) grafts on axonal regeneration after injury. Grafts were assembled from acellular nerve sheaths repopulated ex vivo with Schwann cells (SCs) modified to express brain-derived neurotrophic factor (BDNF), a secretable form of ciliary neurotrophic factor (CNTF), or neurotrophin-3 (NT3). Grafts were used to repair unilateral 1 cm defects in rat peroneal nerves and 10 weeks later outcomes were compared to normal nerves and various controls: autografts, acellular grafts and grafts with unmodified SCs. The number of regenerated βIII-Tubulin positive axons was similar in all grafts with the exception of CNTF, which contained the fewest immunostained axons. There were significantly lower fiber counts in acellular, untransduced SC and NT3 groups using a PanNF antibody, suggesting a paucity of large caliber axons. In addition, NT3 grafts contained the greatest number of sensory fibres, identified with either IB4 or CGRP markers. Examination of semi- and ultra-thin sections revealed heterogeneous graft morphologies, particularly in BDNF and NT3 grafts in which the fascicular organization was pronounced. Unmyelinated axons were loosely organized in numerous Remak bundles in NT3 grafts, while the BDNF graft group displayed the lowest ratio of umyelinated to myelinated axons. Gait analysis revealed that stance width was increased in rats with CNTF and NT3 grafts, and step length involving the injured left hindlimb was significantly greater in NT3 grafted rats, suggesting enhanced sensory sensitivity in these animals. In summary, the selective expression of BDNF, CNTF or NT3 by genetically modified SCs had differential effects on PN graft morphology, the number and type of regenerating axons, myelination, and locomotor function.