Following a peripheral nerve injury, brain-derived neurotrophic factor (BDNF) and the p75 neurotrophin receptor are upregulated in Schwann cells of the Wallerian degenerating nerves. However, it is not known whether the endogenous BDNF is critical for the functions of Schwann cells and regeneration of injured nerve. Treatment with BDNF antibody was shown to retard the length of the regenerated nerve from injury site by 24%. Histological and ultrastructural examination showed that the number and density of myelinated axons in the distal side of the lesion in the antibody-treated mice was reduced by 83%. In the BDNF antibody-treated animals, there were only distorted and disorganized myelinated fibres in the injured nerve where abnormal Schwann cells and phagocytes were present. As a result of nerve degeneration in BDNF antibody-treated animals, subcellular organelles, such as mitochondria, disappeared or were disorganized and the laminal layers of the myelin sheath were loosened, separated or collapsed. Our in situ hybridization revealed that BDNF mRNA was expressed in Schwann cells in the distal segment of lesioned nerve and in the denervated muscle fibres. These results indicate that Schwann cells and muscle fibres may contribute to the sources of BDNF during regeneration and that the deprivation of endogenous BDNF results in an impairment in regeneration and myelination of regenerating axons. It is concluded that endogenous BDNF is required for peripheral nerve regeneration and remyelination after injury.