Background: Current repair options for peripheral nerve injuries where tension-free gap closure is not possible include allograft, processed nerve allograft, and hollow tube conduit. Here we report on the outcomes from a multicenter prospective, randomized, patient-and evaluator-blinded, pilot study comparing processed nerve allograft and hollow conduit for digital nerve reconstructions in the hand. Methods: Across 4 centers, consented participants meeting inclusion criteria while not meeting exclusion criteria were randomized intraoperatively to either processed nerve allograft or hollow conduit. Standard sensory and safety assessments were conducted at baseline, 1, 3, 6, 9, and 12 months after reconstruction. The primary outcome was static 2-point discrimination (s2PD) testing. Participants and assessors were blinded to treatment. The contralateral digit served as the control. Results: We randomized 23 participants with 31 digital nerve injuries. Sixteen participants with 20 repairs had at least 6 months of follow-up while 12-month follow-up was available for 15 repairs. There were no significant differences in participant and baseline characteristics between treatment groups. The predominant nerve injury was laceration/sharp transection. The mean ± SD length of the nerve gap prior to repair was 12 ± 4 mm (5-20 mm) for both groups. The average s2PD for processed allograft was 5 ± 1 mm (n = 6) compared with 8 ± 5 mm (n = 9) for hollow conduits. The average moving 2PD for processed allograft was 5 ± 1 mm compared with 7 ± 5 mm for hollow conduits. All injuries randomized to processed nerve allograft returned some degree of s2PD as compared with 75% of the repairs in the conduit group. Two hollow conduits and one allograft were lost due to infection during the study. Conclusions: In this pilot study, patients whose digital nerve reconstructions were performed with processed nerve allografts had significantly improved and more consistent functional sensory outcomes compared with hollow conduits.