Nerve capping techniques have been introduced as a promising treatment modality for the treatment of painful neuroma with varied outcomes; however, its exact mechanism is still unknown. RhoA is one of the members of the RAS superfamily of GTPases that operate as molecular switches and plays an important role in peripheral nerve regeneration. Our aim was to investigate the structural and morphologic mechanisms by which the nerve capping technique prevents the formation of painful neuromas after neuroectomy. We also hoped to provide a theoretical basis for this treatment approach. An aligned nanofiber conduit was used for the capping procedure and the sciatic nerve of Sprague-Dawley rats was selected as the animal model. Behavioral analysis, extent of neuroma formation, histological assessment, expressions of pain markers of substance P and c-fos, molecular biological changes as well as ultrastructural features were investigated and compared with the findings in a no-capping control group. The formation of traumatic neuromas was significantly inhibited in the capping group with relatively "normal" structural and morphological features and no occurrence of autotomy and significantly lower expression of pain markers compared to the no-capping group. The gene expression of RhoA was consistently in a higher level in the capping group within 8 weeks after surgery. This study shows that capping technique will alter the regeneration state of transected nerves and reduce painful neuroma formation, indicating a promising approach for the treatment of painful neuroma. The initiation of the "regenerative brake" induced by structural as well as morphological improvements in the severed nerve is theorized to be most likely a key mechanism for the capping technique in the prevention of painful neuroma formation.