The development of neural interfaces with superior biocompatibility and improved tissue integration is vital for treating and restoring neurological functions in the nervous system. A critical factor is to increase the resolution for mapping neuronal inputs onto implants. For this purpose, we have developed a new category of neural interface comprising induced pluripotent stem cell (iPSC)-derived myocytes as biological targets for peripheral nerve inputs that are grafted onto a flexible electrode arrays. We show long-term survival and functional integration of a biohybrid device carrying human iPSC-derived cells with the forearm nerve bundle of freely moving rats, following 4 weeks of implantation. By improving the tissue-electronics interface with an intermediate cell layer, we have demonstrated enhanced resolution and electrical recording in vivo as a first step toward restorative therapies using regenerative bioelectronics.