A new type of a biodegradable nerve graft conduit material, the amnion tube, has been developed in our laboratory. To test the tube in the peripheral nerve regeneration process, it was initially applied across a 1-cm sciatic nerve gap in rats and was compared with other nerve conduit materials. We used male Sprague-Dawley rats as our animal model. The experiment included 66 rats that were randomly assigned into five groups: autograft (n = 17), amnion tube (n = 19), silicone tube (n = 20), no repair (n = 7), and sham group (n = 3). The process of peripheral nerve regeneration was evaluated at 2, 4, 10, and 17 weeks following injury and repair by using morphologic and functional assessments of the outcome of nerve regeneration in each animal. Nerve regeneration across the amnion tube nerve conduit was comparable with that seen in autograft and superior to that of the silicone group. A uniform nerve tissue was seen filling and crossing the amnion conduit, and the regenerated nerve from the proximal stump reached the distal end and was undifferentiated from the normal nerve tissues. At 4 months, the amnion tube biodegraded and no longer could be identified and differentiated from the nerve tissues. The amnion tube animal group showed a number of axons very close to that in the nerve autograft group (37,157 versus 33,054). Functional recovery at a 2- to 4-week interval was significantly statistically higher only in the amnion tube animal group (p = 0.01). However, the improvement disappeared between 10 and 17 weeks. In conclusion, the amnion tube is a potential ideal nerve conduit material secondary to its unique characteristics: it contains important neurotropic factors, is biodegradable, provokes a very weak immune response, is semiflexible, is readily available, and is easily manufactured into different sizes and diameters.