The goal of this study was to determine the contribution of the distal nerve sheath to sensory protection. Following tibial nerve transection, rats were assigned to one of the following groups: (1) saphenous-to-tibial nerve neurorrhaphy; (2) saphenous-to-gastrocnemius neurotization; (3) unprotected controls (tibial nerve transection); or (4) immediate common peroneal-to-tibial nerve neurorrhaphy. After a 6-month denervation period and motor reinnervation, ultrastructural, histologic, and morphometric analyses were performed on the distal tibial nerve and gastrocnemius muscle cross-sections. Sensory axons neurotized to muscle maintain existing muscle integrity, as demonstrated by less fibrosis, collagenization, and fat deposition, more than unprotected muscle, and preserve the distribution pattern of fast twitch fibers. However, neurorrhaphy of the sensory nerve to the distal tibial nerve (involving the distal nerve sheath) improves existing endoneurial sheath structure, demonstrated by reduced collagen, and enhances regeneration, shown by improved axon-to-Schwann cell coupling and increased axon area. The authors conclude that sensory protection of muscle does not require the distal nerve sheath, but that preservation of the distal sheath may contribute to enhanced nerve regeneration.