Surgical reconstruction of large Achilles tendon defects is technically demanding. There is no standard method, and tissue engineering may be a valuable option. We investigated the effects of 3D collagen and collagenpolydioxanone sheath (PDS) implants on a large tendon defect model in rabbits. Ninety rabbits were divided into three groups: control, collagen, and collagen-PDS. In all groups, 2 cm of the left Achilles tendon were excised and discarded. A modified Kessler suture was applied to all injured tendons to retain the gap length. The control group received no graft, the treated groups were repaired using the collagen only or the collagen-PDS prostheses. The bioelectrical characteristics of the injured areas were measured at weekly intervals. The animals were euthanized at 60 days after the procedure. Gross, histopathological and ultrastructural morphology and biophysical characteristics of the injured and intact tendons were investigated. Another 90 pilot animals were also used to investigate the inflammatory response and mechanism of graft incorporation during tendon healing. The control tendons showed severe hyperemia and peritendinous adhesion, and the gastrocnemius muscle of the control animals showed severe atrophy and fibrosis, with a loose areolar connective tissue filling the injured area. The tendons receiving either collagen or collagen-PDS implants showed lower amounts of peritendinous adhesion, hyperemia and muscle atrophy, and a dense tendon filled the defect area. Compared to the control tendons, application of collagen and collagen-PDS implants significantly improved water uptake, water delivery, direct transitional electrical current and tissue resistance to direct transitional electrical current. Compared to the control tendons, both prostheses showed significantly increased diameter, density and alignment of the collagen fibrils and maturity of the tenoblasts at ultrastructure level. Both prostheses influenced favorably tendon healing compared to the control tendons, with no significant differences between collagen and collagen-PDS groups. Implantation of the 3D collagen and collagen-PDS implants accelerated the production of a new tendon in the defect area, and may become a valuable option in clinical practice.