The effect of a distal site of nerve compression on neural regeneration after a nerve repair was investigated in the rat model. After chronic compression had been established by placement of a Silastic band about a distal site of the posterior tibial nerve, the proximal posterior tibial nerve was divided, and then immediately repaired. Beginning 6 months after nerve repair, neural regeneration, assayed by walking track analysis, demonstrated significantly impaired function in the group of rats with a distal site of compression, compared with the repair group without a distal site of compression (p < .05). Followed for 3 additional months, neural function further significantly (p < .001) deteriorated in the group with distal compression. Morphometric analysis demonstrated that both the nerve repair alone and repair-plus-compression groups had 1) significantly decreased axon and nerve-fiber diameters (p < .001), and 2) significantly increased myelinated nerve-fiber density (p < .001), compared with normal; these findings are consistent with neural regeneration. However, the repair-plus-compression group had significantly (p < .03) fewer regenerating fibers than did the repair-without-distal-compression group. This experimental study suggests that consideration be given to release of sites of known anatomic narrowing in close proximity to a nerve reconstruction.