Artificial guidance channels containing Schwann cells can promote the regeneration of injured peripheral nerve over long distances. However, primary Schwann cells are not suitable for autotransplantation. Under specific conditions, skin-derived progenitors can be induced to differentiate into Schwann cells. Therefore, adult rat dorsal skin(dermis)-derived progenitors were isolated and induced to differentiate with DMEM/F12 containing B27, neuregulin 1, and forskolin. Immunofluorescence staining and reverse transcription polymerase chain reaction(RTPCR) confirmed that the resultant cells were indeed Schwann cells. Artificial guidance channels containing skin-derived progenitors, Schwann cells originating from skin-derived progenitors, or primary Schwann cells were used to bridge 5 mm sciatic nerve defects. Schwann cells originating from skin-derived progenitors significantly promoted sciatic nerve axonal regeneration. The significant recovery of injured rat sciatic nerve function after the transplantation of Schwann cells originating from skin-derived progenitors was confirmed by electromyogram. The therapeutic effect of Schwann cells originating from skin-derived progenitors was better than that of skin-derived progenitors. These findings indicate that Schwann cells originating from skin-derived precursors can promote peripheral nerve regeneration in rats. Artificial guidance channels containing Schwann cells can promote the regeneration of injured peripheral nerve over long distances. However, primary Schwann cells are not suitable for autotransplantation. Under specific conditions, skin-derived progenitors can be induced to differentiate into Schwann cells. Therefore, adult rat Drosal skin (dermis) -derived progenitors were isolated and induced to differentiate with DMEM / F12 containing B27, neuregulin 1, and forskolin. Immunofluorescence staining and reverse transcription polymerase chain reaction (RTPCR) confirmed that the resultant cells were indeed Schwann cells. Artificial guidance channels containing skin-derived progenitors, Schwann cells originating from skin-derived progenitors, or primary Schwann cells were used to bridge 5 mm sciatic nerve defects. Schwann cells originating from skin-derived progenitors labeled as promoted sciatic nerve axonal regeneration. The significant recovery of injured rat sciatic nerve function after the transplantation of Schwann cells originating from skin-derived progenitors was confirmed by electromyogram. The therapeutic effect of Schwann cells originating from skin-derived progenitors was better than that of skin-derived progenitors. These findings indicate that skin cells derived from skin-derived precursors can promote peripheral nerve regeneration in rats.