Hudson's optimized chemical processing method is the most commonly used chemical method to prepare acellular nerve scaffolds for the reconstruction of large peripheral nerve defects. However, residual myelin attached to the basal laminar tube has been observed in acellular nerve scaffolds prepared using Hudson's method. Here, we describe a novel method of producing acellular nerve scaffolds that eliminates residual myelin more effectively than Hudson's method through the use of various detergent combinations of sulfobetaine-10, sulfobetaine-16, Triton X-200, sodium deoxycholate, and peracetic acid. In addition, the efficacy of this new scaffold in repairing a 1.5 cm defect in the sciatic nerve of rats was examined. The modified method produced a higher degree of demyelination than Hudson's method, resulting in a minor host immune response in vivo and providing an improved environment for nerve regeneration and, consequently, better functional recovery. A morphological study showed that the number of regenerated axons in the modified group and Hudson group did not differ. However, the autograft and modified groups were more similar in myelin sheath regeneration than the autograft and Hudson groups. These results suggest that the modified method for producing a demyelinated acellular scaffold may aid functional recovery in general after nerve defects.