Silk fibroin (SF) has been used extensively in the biomedical field including tissue engineering for the generation of artificial bones, skins or ligaments. We have previously reported on good in vitro biocompatibility of SF fibers with peripheral nerve tissues and cells. In the present study, we developed a novel design of the SF-based artificial nerve graft (SF graft) which was composed of a SF-nerve guidance conduit (NGC) inserted with SF fibers. MTT assay was performed to determine the cytotoxicity of the SF-NGC extract fluid on the cultured L929 cells derived from an immortalized mouse fibroblast cell line. In addition, this SF graft was implanted into adult rats for bridging a 10-mm long sciatic nerve defect. The following-up experiments at initial stage (1-4 week) of nerve regeneration including routine blood tests and histochemical investigation were conducted to evaluate the in vivo biocompatibility of the SF graft with peripheral nerves. The results demonstrated that the SF-NGC graft was biocompatible with the surrounding tissues and cells due to its low inflammatory potential with a grade O under the U. S. Pharmacopeia guidelines and it was generally suitable to a certain degree for bridging peripheral nerve defects in virtue of supporting Schwann cell adherence, expansion and migration. Therefore the SF graft is a promising alternative to classical autografts for peripheral nerve repair.