Strategies for therapeutic cell transplantation have been assessed for use in the treatment of massive peripheral nerve defects. To support safe and efficient cell transplantation, we have focused on the purification of cells using cell surface markers. Our group previously reported low-affinity nerve growth factor receptor (LNGFR)- and thymocyte antigen-1 (THY-1)-positive neural crest-like cells (LT-NCLCs), generated from human induced pluripotent stem cells (hiPSCs). In the present study, we investigated the efficacy of transplantation of hiPSC-derived LT-NCLCs in a murine massive peripheral nerve defect model. Animals with a sciatic nerve defect were treated with a bridging silicone tube prefilled with LT-NCLCs or medium in the transplantation (TP) and negative control (NC) groups, respectively. The grafted LT-NCLCs survived and enhanced myelination and angiogenesis, as compared to the NC group. Behavioral analysis indicated that motor functional recovery in the TP group was superior to that in the NC group, and similar to that in the autograft (Auto) group. LT-NCLCs promoted axonal regrowth and remyelination by Schwann cells. Transplantation of LT-NCLCs is a promising approach for nerve regeneration treatment of massive peripheral nerve defects.