Denervated forelimbs and contralateral innervated forelimbs of Ambystoma larvae were injured internally distal to the elbow by compression with watchmaker's forceps. Innervated controls completely repaired the crush injury within one week; denervated limbs failed to repair the injury and exhibited varying degrees of limb regression. Histological examination revealed that the process of tissue dedifferentiation initiated by injury was more extensive in denervated, regressing limbs than in controls. In innervated limbs, both the DNA labeling index and the mitotic index peaked approximately 4--6 days after the injury and returned to baseline levels by 10 days. In denervated limbs, the DNA labelling index also increased and remained at an elevated level for at least 2 weeks after the injury, but significant mitotic activity was not observed. The data indicate that intact nerves are not needed for cellular dedifferentiation, cell cycle re-entry, and DNA synthesis in injured limbs, but are required for the cells to proliferate and repair the injury. These results are discussed together with those of similar experiments on the role of nerve during the initiation of epimorphic regeneration in amputated limbs.