Peripheral nerve regeneration across nerve gaps is often suboptimal, with poor functional recovery. Stem cell transplantation-based regenerative therapy is a promising approach for axon regeneration and functional recovery of peripheral nerve injury; however, the mechanisms remain controversial and unclear. Recent studies suggest that transplanted stem cells promote tissue regeneration through a paracrine mechanism. We investigated the effects of conditioned media derived from stem cells from human exfoliated deciduous teeth (SHED-CM) on peripheral nerve regeneration. In vitro, SHED-CM-treated Schwann cells exhibited significantly increased proliferation, migration, and the expression of neuron-, extracellular matrix (ECM)-, and angiogenesis-related genes. SHED-CM stimulated neuritogenesis of dorsal root ganglia and increased cell viability. Similarly, SHED-CM enhanced tube formation in an angiogenesis assay. In vivo, a 10-mm rat sciatic nerve gap model was bridged by silicon conduits containing SHED-CM or serum-free Dulbecco's modified Eagle's medium. Light and electron microscopy confirmed that the number of myelinated axons and axon-to-fiber ratio (G-ratio) were significantly higher in the SHED-CM group at 12 weeks after nerve transection surgery. The sciatic functional index (SFI) and gastrocnemius (target muscle) wet weight ratio demonstrated functional recovery. Increased compound muscle action potentials and increased SFI in the SHED-CM group suggested sciatic nerve reinnervation of the target muscle and improved functional recovery. We also observed reduced muscle atrophy in the SHED-CM group. Thus, SHEDs may secrete various trophic factors that enhance peripheral nerve regeneration through multiple mechanisms. SHED-CM may therefore provide a novel therapy that creates a more desirable extracellular microenvironment for peripheral nerve regeneration.