We used peripheral nerve allografts, already employed clinically to reconstruct devastating peripheral nerve injuries, to study Schwann cell (SC) plasticity in adult mice. By modulating the allograft treatment modality we were able to study migratory, denervated, rejecting, and reinnervated phenotypes in transgenic mice whose SCs expressed GFP under regulatory elements of either the S100b (S100-GFP) or nestin (Nestin-GFP) promoters. Well-differentiated SCs strongly expressed S100-GFP, while Nestin-GFP expression was stimulated by denervation, and in some cases, axons were constitutively labeled with CFP to enable in vivo imaging. Serial imaging of these mice demonstrated that untreated allografts were rejected within 20 days. Cold preserved (CP) allografts required an initial phase of SC migration that preceded axonal regeneration thus delaying myelination and maturation of the SC phenotype. Mice immunosuppressed with FK506 demonstrated mild subacute rejection, but the most robust regeneration of myelinated and unmyelinated axons and motor endplate reinnervation. While characterized by fewer regenerating axons, mice treated with the co-stimulatory blockade (CSB) agents anti-CD40L mAb and CTLAIg-4 demonstrated virtually no graft rejection during the 28 day experiment, and had significant increases in myelination, connexin-32 expression, and Akt phosphorylation compared with any other group. These results indicate that even with SC rejection, nerve regeneration can occur to some degree, particularly with FK506 treatment. However, we found that co-stimulatory blockade facilitate optimal myelin formation and maturation of SCs as indicated by protein expression of myelin basic protein (MBP), connexin-32 and phospho-Akt.