Schwann cells play a dual role serving as a physical framework for regenerating nerves, providing extracellular matrix proteins and specific adhesion molecules facilitating attachment and cell movement, and as a source of stimulatory factors mediated by the release or reception of different ligands important in growth and cell signaling events. To investigate the role of one such ligand, glial growth factor (GGF), in peripheral nerve regeneration, a bioabsorbable nerve guide, prepared from a poly(lactic-co-glycolic) acid (PLGA) foam was seeded with autogenous Schwann cells in the presence and absence of growth factor and evaluated in vivo using a rat sciatic nerve regeneration model. Four weeks post-operatively peripheral nerve regeneration was evident. The resorbable foam implant demonstrated extensive neo-vascularization in and around the guide with no evidence of an inflammatory response or encapsulation. The study showed a statistically significant increase in all measured parameters of nerve regeneration in the presence of GGF. Increased numbers of blood vessels in the regenerated tissue accompanied increased total axon counts after twelve weeks. The addition of exogenous Schwann cells resulted in reduced total axon counts perhaps due to the competition for limited growth factors released by the regenerating tissues. The Schwann cell groups, however, displayed the highest myelination indices recorded likely reflecting the role of Schwann cells in the myelination process. Measurements of conduction velocities (EMGs) revealed the highest conductance velocities recorded in nerves regenerated in the presence of both GGF and Schwann cells. Clearly, the inclusion of GGF in the nerve regenerative process is beneficial with respect to both the generation of new axons and the establishment of a functional endpoint.