Autologous vein wrapping is used to treat recurrent chronic constriction neuropathy and traumatic peripheral nerve injury. However, its use is restricted due to the inability to obtain sufficiently long veins for larger grafts. We previously reported that vein‐derived basic fibroblast growth factor (bFGF) promotes heme oxygenase‐1 (HO‐1), which reduces allodynia via its anti‐inflammatory properties. To mimic vein wrapping, we developed a collagen sheet impregnated with bFGF. Chronic constriction injury (CCI) was induced in male Wistar rats as a model of sciatic nerve injury, and the rats were divided into three groups: (i) untreated after CCI surgery (control group), (ii) treated with a collagen sheet wrap impregnated with phosphate‐buffered saline (PBS/CS group), and (iii) treated with a collagen sheet wrap impregnated with bFGF (bFGF/CS group). Pain behavior (von Frey test) was evaluated on postoperative days (PODs) 1, 5, 7, and 14. Quantitative polymerase chain reaction was conducted on sciatic nerve RNA to quantify HO‐1 gene, Hmox1, expression. Enzyme‐linked immunosorbent assay were used to determine HO‐1 protein levels on POD 1. von Frey testing showed significantly greater pain hypersensitivity in the control and PBS/CS groups than the bFGF/CS group. In the bFGF/CS group, Hmox1 messenger RNA and HO‐1 protein levels were significantly increased in the sciatic nerve compared with the control and PBS/CS groups on PODs 1 and 5 and POD 1, respectively. The bFGF/CS group showed decreased allodynia and HO‐1 induction, as observed with vein wrapping. Therefore, local application of bFGF may be an alternative treatment strategy for compressive neuropathy and peripheral nerve trauma in clinical settings. © 2019 Orthopaedic Research Society. Published by Wiley Periodicals, Inc. J Orthop Res 37:2258–2263, 2019