Tissue engineering in the peripheral nervous system unites efforts by physicians, engineers, and biologists to create either natural or synthetic tubular nerve guidance channels as alternatives to nerve autografts for the repair of peripheral nerve defects. Guidance channels help direct axons sprouting from the regenerating nerve end, provide a conduit for diffusion of neurotropic and neurotrophic factors secreted by the damaged nerve stumps, and minimize infiltration of fibrous tissue. In addition to efforts to control these physical characteristics of nerve guidance channels, researchers are optimizing the incorporation of biologic factors and engineering interactive biomaterial that can specifically stimulate the regeneration process. Current and future research will ultimately result in biologically active and interactive nerve guidance channels that can support and enhance peripheral nerve regeneration over longer, more clinically relevant defect lengths.