Peripheral nerve injuries are often associated with loss of nerve tissue and require a graft to bridge the gap. Autologous nerve grafts are still the 'gold standard' in reconstructive surgery but have several disadvantages, such as sacrifice of a functional nerve, neuroma formation and loss of sensation at the donor site. Bioengineered grafts represent a promising approach to address this problem. In this study, poly-3-hydroxybutyrate (PHB) strips were used to bridge a 10 mm rat sciatic nerve gap and their effects on long-term (12 weeks) nerve regeneration were compared. PHB strips were seeded with different cell types, either primary Schwann cells (SCs) or SC-like differentiated adipose-derived stem cells (dASCs) suspended in a fibrin glue matrix. The control group was PHB and fibrin matrix without cells. Functional and morphological properties of the regenerated nerve were assessed using walking track analysis, EMGs, muscle weight ratios and muscle and nerve histology. The animals treated with PHB strips seeded with SCs or dASCs showed significantly better functional ability than the control group. This correlated with less muscle atrophy and greater axon myelination in the cell groups. These findings suggest that the PHB strip seeded with cells provides a beneficial environment for nerve regeneration. Furthermore, dASCs, which are abundant and easily accessible, constitute an attractive cell source for future applications of cell therapy for the clinical repair of traumatic nerve injuries. Copyright © 2014 John Wiley & Sons, Ltd.