BACKGROUND: Nanotechnology has widely used in tissue engineered reconstruction in recent years. Most reports are concerning carbon nanomaterials in bone reparation, but the study of peripheral nerve regeneration is poorly understood. OBJECTIVE: To improve the physical, chemical and biological properties of chitosan/collagen composite nerve conduit with functionalized carbon nanotubes, in addition, to investigate the therapeutic effect of this novel material. DESIGN, TIME AND SETTING: The same body controlled experiment of animals was performed at the Tissue Engineering Laboratory and The Key Laboratory of Thin Film and Microfabrication Technology, Shanghai Jiao Tong University from February 2005 to November 2006. MATERIALS: The carbon nanotubes were mixed with 2% chitosan solution, coated on the die to prepare chitosan/collagen composite nerve conduit with functionalized carbon nanotubes. The chitosan/collagen tubes were served as controls. METHODS: A total of 80 male adult-rats were prepared a 4 mm accessory nerve defects models, and repaired by nerve conduit in the experimental material and control material groups. In the auto nerve grafts group, the removed nerve was connected to the broken end. In the blank control group, there was no other treatment except removing 2 mm nerves. The left sides were served as experimental sides and the right sides as within-subject controls. MAIN OUTCOME MEASURES: The repairing outcomes were measured by electrophysiological, myophysiological, and histological measurements. RESULTS: The accessory nerve defects were repaired in a rat model using carbon nanotubes in chitosan/collagen-based composite nerve conduit. As time passed after the surgery, good results of the electrophysiological, myophysiological and histological measurements were achieved, which were similar or superior to those of the nerve autografts. CONCLUSION: The carbon nanotubes in chitosan/collagen-based composite can be an ideal candidate for peripheral nerve regeneration.