Peripheral nerve grafting into the central nervous system (CNS) has been used to study the regenerative capabilities of central neurons given access to a peripheral nervous system (PNS) environment. It is well documented that many CNS neurons regenerate axons along peripheral nerve grafts placed in close proximity to their cell bodies and that these grafts can ameliorate axotomy-induced retrograde degeneration. In the present study, we placed peripheral nerve grafts in proximity to axotomized neurons of the anterior thalamus. Standard histological and retrograde tracing techniques were used to examine these preparations 2 months after grafting. Three effects of these grafts were observed: amelioration of retrograde degeneration of axotomized anterior thalamic neurons, hypertrophy of many thalamic neurons in the local environment of the graft, and ingrowth of axons of axotomized anterior thalamic neurons as well as nonaxotomized neurons from surrounding nuclei. We conclude from these studies that peripheral nerve grafts not only provide a matrix for axonal outgrowth but also exert marked trophic and tropic effects on axotomized anterior thalamic neurons.