To identify factors affecting peripheral nerve function during limb lengthening, serial somatosensory evoked potentials studies were performed in 18 goats and correlated with gross appearance of the soft tissues at necropsy. In 15 goats, a 20% or 30% tibial lengthening was done using the Ilizarov apparatus at a rate of 0.75 mm per day and rhythm of 1, 4, or 720 times per day. Three animals served as frame/corticotomy controls. Seven lengthened and 2 control animals maintained normal somatosensory evoked potentials throughout the study. At necropsy, the peroneal and tibial nerves appeared grossly normal. In one control animal with irreversible loss of evoked potentials documented intraoperatively, peroneal nerve impalement by a transfixion wire was identified at necropsy. Eight lengthened animals experienced significant changes of peroneal nerve conduction. In 6 of these 8 animals, transfixion wires were found to be disrupting the nerve in some way. In the remaining 2 animals, no offending wires were identified, but there was extensive diffuse soft tissue fibrosis within the extremity. The rhythm of distraction did not have an important influence on evoked potential changes during the course of distraction. Although there was a correlation between the amount of lengthening performed and the degree of evoked potentials deterioration, the anatomic relationship between the wires and nerves was a more important factor in the development of these abnormalities.