The failure of axons to regenerate in the central nervous system is mainly due to inhibition by the environment, made up of astrocytes and oligodendrocytes, which surrounds regions of damage. Both cell types are inhibitory to axon regeneration, and it seems likely that each will have to be neutralised before significant axon regeneration is achieved. Axons regenerate over the surface of astrocytes grown in normal monolayer culture but not through three-dimensional astrocyte cultures. Astrocyte cell lines have been created, some of which resemble embryonic astrocytes and form a loose tissue with extensive extracellular space which permits axon regeneration, and others which model astrocytes in the damaged brain having little extracellular space and much extracellular matrix material. There is no correlation between the inhibitory effect on axons and the expression of cell adhesion molecules, proteases, protease inhibitors, and a variety of extracellular matrix molecules. However, extracellular matrix produced by inhibitory cell lines is inhibitory to axon regeneration, while that produced by permissive cell lines is not. This difference depends on the production of a chondroitinase-sensitive proteoglycan which can block the neurite-inducing effects of laminin so that treatment of inhibitory extracellular matrix with chondroitinase renders it more permissive to axon regeneration.