Background: The repair of a segmental peripheral nerve injury is a clinical challenge. Several studies have been performed to determine superior methods for overcoming nerve gaps. The purpose of this study was to investigate if the inside-out slided epineurium of the distal segment of an injured nerve can serve as a conduit to bridge a short nerve defect (10 mm). Methods: Nineteen sciatic nerves in Sprague-Dawley rats were transected, and a 10-mm gap was left between the ends. A section of distal epineurium was pulled inside out to bridge the gap. Walking track analysis was performed, and the sciatic function index (SFI) was calculated. Wet muscle mass and withdrawal reflex were measured. The density of axon fibers at different levels of repaired nerves was determined, and histological analysis was performed at 16 weeks. Results: The mean SFI improved from −81.0 at 4 weeks to 36.3 at 16 weeks. The axon densities showed regeneration through the epineural tube, and 5 of the rats demonstrated a withdrawal reflex. The weight of the tibialis anterior muscle of the injured limb at 16 weeks was 59% that of the uninjured side. Conclusions: The distal epineural sheath tube provided a size-matched conduit between the nerve stumps, with no histological donor-site morbidity. Histologically, regeneration occurred through the epineural tube without neuroma formation, and functional recovery was comparable to that of previous studies of nerve repair techniques. Technique may be an addition to the armamentarium of tools used to treat segmental nerve defects.