Purpose To evaluate the efficacy of self-retained cryopreserved amniotic membrane (CAM) in promoting corneal nerve regeneration and improving corneal sensitivity in dry eye disease (DED). Methods In this prospective randomized clinical trial, subjects with DED were randomized to receive CAM (study group) or conventional maximum treatment (control). Changes in signs and symptoms, corneal sensitivity, topography, and in vivo confocal microscopy (IVCM) were evaluated at baseline, 1 month, and 3 months. Results Twenty subjects (age 66.9 ± 8.9) were enrolled and 17 completed all follow-up visits. Signs and symptoms were significantly improved in the study group yet remained constant in the control. IVCM showed a significant increase in corneal nerve density in the study group (12,241 ± 5083 μm/mm2 at baseline, 16,364 ± 3734 μm/mm2 at 1 month, and 18,827 ± 5453 μm/mm2 at 3 months, p = 0.015) but was unchanged in the control. This improvement was accompanied with a significant increase in corneal sensitivity (3.25 ± 0.6 cm at baseline, 5.2 ± 0.5 cm at 1 month, and 5.6 ± 0.4 cm at 3 months, p < 0.001) and corneal topography only in the study group. Conclusions Self-retained CAM is a promising therapy for corneal nerve regeneration and accelerated recovery of the ocular surface health in patients with DED. The study is registered at clinicaltrials.gov with trial identifier: NCT02764814.