Functional recovery after peripheral nerve injury depends on both improvement of nerve regeneration and prevention of denervation-related skeletal muscle atrophy. To reach these goals, in this study we overexpressed vascular endothelial growth factor (VEGF) by means of local gene transfer with adeno-associated virus (AAV). Local gene transfer in the regenerating peripheral nerve was obtained by reconstructing a 1-cm-long rat median nerve defect using a vein segment filled with skeletal muscle fibers that have been previously injected with either AAV2-VEGF or AAV2-LacZ, and the morphofunctional outcome of nerve regeneration was assessed 3 months after surgery. Surprisingly, results showed that overexpression of VEGF in the muscle-vein-combined guide led to a worse nerve regeneration in comparison with AAV-LacZ controls. Local gene transfer in the denervated muscle was obtained by direct injection of either AAV2-VEGF or AAV2-LacZ in the flexor digitorum sublimis muscle after median nerve transection and results showed a significantly lower progression of muscle atrophy in AAV2-VEGF-treated muscles in comparison with muscles treated with AAV2-LacZ. Altogether, our results suggest that local delivery of VEGF by AAV2-VEGF-injected transplanted muscle fibers do not represent a rational approach to promote axonal regeneration along a venous nerve guide. By contrast, AAV2-VEGF direct local injection in denervated skeletal muscle significantly attenuates denervation-related atrophy, thus representing a promising strategy for improving the outcome of post-traumatic neuromuscular recovery after nerve injury and repair.