Silicon tubes were used to study the outgrowth and differentiation of the perineurium around the cord bridging the gap between the proximal and distal stumps of the transected sciatic nerve of rats. The sequence of events was investigated at time intervals 3, 7, 12, 18, and 21 days after surgery. Although similar tubulation systems have been used to investigate various aspects of peripheral nerve fibre regeneration, the present study shows for the first time with electron microscopic and immunocytochemical methods that a primitive perineurium bridges the gap as the initial cellular element. This perineurium develops from outgrowing fibroblasts as early as 7 days post surgery, forming a tube which is used as a guiding structure for subsequent cellular elements. The proximal and distal perineurial tubes join between 12 and 18 days after surgery thus representing the first connection between the proximal and distal nerve stumps. Blood vessels, Schwann cells, and axons appear to follow in this sequence.