An experimental neuropathy in rats produced by tying loosely constrictive ligatures around one sciatic nerve has recently been shown to produce pain-related behavior that follows a reproducible time course. In the present study, we assessed the degree of thermal hyperesthesia and examined the sciatic nerves by light and electron microscopy at different time points from 1 day to 12 weeks after surgery. Edema was the initial pathologic change seen in the neuropathy and was associated with early Wallerian degeneration on day 1. Injury to the connective tissue sheaths with interruption of the perineurial layer, infiltration of macrophages into the endoneurium, and proliferation of endothelial cells were observed during the first week. Endothelial cells hypertrophied and changed to a rhomboid shape with gaps between adjacent cells. Most large myelinated and many small myelinated fibers underwent Wallerian degeneration. Unmyelinated fiber numbers were reduced to one-third of the normal value from day 5 to day 14. Axonal sprouts were numerous after 1 week and grew into the segment distal to the ligatures by 4 weeks. Aberrant sprouts in minifascicles outside the perineurium were present from 4 weeks on. The original ligatures were rapidly surrounded by large amounts of fibrous tissue and mostly absorbed by 12 weeks; the initial fascicular compression caused by the ligatures was maintained by the fibrous tissue. We conclude that, whereas neuroma formation may contribute to the pain-related behavior in the later stages of this neuropathy, acute changes in the endoneurial microenvironment are important for its initial development.