Nerve injuries are often debilitating as its regeneration occurs in a slow and laborious manner. Remediation of nerve injury is a colossal task as functional restoration in larger gaps seldom occurs due to the complex nerve regeneration mechanism. A nanofiber‐based graft material has been fabricated to provide topographical and biochemical cues to encourage neural differentiation. Laminin plays a crucial role in supporting peripheral nerve regeneration and hence aligned polyvinyl cinnamate nanofibers surface‐conjugated with laminin‐derived cell‐adhesion peptides have been fabricated to improve selective neural adhesion and regeneration. Further, triiodothyronine has been encapsulated within the nanofibers enabling its sustained release so as to bolster regeneration and reinstate the lost functionality to the damaged nerve. The fabricated nanofibers were characterized for its physicochemical, morphological, and topographical properties. Nanofibers were biocompatible, improved cell adhesion rate, and illustrated favourable interaction with cells. Gene expression (showed 9.5 and 4.1 fold increase in β‐tubulin and MAP 2 expression, respectively) and protein expression (immunofluorescence, flow cytometry, and western blot) studies confirmed the positive influence of the scaffold over cell differentiation. The studies were extrapolated to adult zebrafish model with a surgical incision in posterior lateral line. The biocomposite treated group showed earlier functional restoration of the nerve compared with control groups detected by touch‐evoked response. Thus, the combination of aligned nanofibers providing topographical cue, along with the peptides and triiodothyronine serving as biochemical cues, has a robust potential to restore functionality to the injured nerve, thereby opening avenues for fabrication of regenerative nerve grafts.