Transplantation of embryonic brain tissue or mature peripheral nerves into the adult mammalian central nervous system promotes axonal regrowth from axotomized central nervous system neurons; however, the cellular origin and molecular nature of the factors promoting axonal growth in vivo are unknown. To further characterize cellular environments that facilitate regeneration of central nervous system axons, we developed a methodology whereby cultured cell preparations can be transplanted into the brain of mature mammals. For this procedure, lesions are produced in the septal-hippocampal system of adult rats, and selected regions from collagen-supported Schwann cell/neuron cultures (consisting of Schwann cells, extracellular matrix, and degenerating neuronal processes and myelin but devoid of neuronal perikarya and fibroblasts) are positioned within the intracephalic cavity so that they bridge the lesion gap (approximately 3 mm) separating the septum and hippocampus. At various time up to 3 weeks after transplantation, specimens were prepared for acetylcholinesterase histochemistry and the immunocytochemical localization of laminin (an extracellular matrix protein) and C-4 (a Schwann cell membrane antigen). All specimens (from uninjured controls and from animals with either acellular collagen or mature Schwann cell/extracellular matrix transplants) contained laminin immunoreactivity associated with the meninges, choroid plexus, ependyma, and cerebral blood vessels. All animals with transplants showed prominent laminin staining on astrocytic processes along the intracephalic cavity, but only the Schwann cell/extracellular matrix transplants exhibited dense laminin and C-4 immunoreactivity within the cellular portion of the transplants. Regeneration of acetylcholinesterase-positive septal fibers occurred only in animals containing Schwann cell/extracellular matrix transplants. By 6 days after transplantation, acetylcholinesterase-positive fibers were observed both on laminin-positive cellular tissue strands connecting the septum and the Schwann cell/extracellular matrix transplants and on the initial portions of the transplants. By day 14, acetylcholinesterase-positive fibers traversed the entire lesion cavity in intimate association with the laminin- and C-4-positive cellular layer of the transplants and reinnervated the host hippocampus. However, cholinergic fibers were not associated with all laminin-containing processes along the lesion cavity nor did they grow along acellular collagen transplants. These results indicate the presence of factors in transplants of cultured Schwann cells and their associated extracellular matrix that promote rapid regeneration of central nervous system cholinergic axons in vivo.