No satisfactory method currently exists for bridging neural defects. Autografts lead to inadequate functional recovery, and most available artificial neural conduits possess unfavorable swelling and pro-inflammatory characteristics. This study examined the biocompatibility of a novel biodegradable elastomer, poly(glycerol sebacate) (PGS), for neural reconstruction applications, as the material possesses favorable mechanical property and degradation characteristics. The effect of PGS on Schwann cell metabolic activity, attachment, proliferation, and apoptosis were examined in vitro in comparison with poly(lactide-co-glycolide) (PLGA), a biomaterial widely utilized for tissue engineering applications. The in vivo tissue response to PGS was compared with PLGA implanted juxtaposed to the sciatic nerve; the physical changes in the implant material were measured during the degradation process. PGS had no deleterious effect on Schwann cell metabolic activity, attachment, or proliferation, and did not induce apoptosis; the in vitro effects of PGS were similar to or superior to that of PLGA. In vivo, PGS demonstrated a favorable tissue response profile compared with PLGA, with significantly less inflammation and fibrosis and without detectable swelling during degradation. PGS is an excellent candidate material for neural reconstruction applications given its lack of in vitro Schwann cell toxicity and minimal in vivo tissue response.