Injuries to the peripheral nerves result in partial or total loss of motor, sensory, and autonomic functions in the denervated segments of the body due to the interruption of axons, degeneration of distal nerve fibers, and eventual death of axotomized neurons. Functional deficits caused by nerve injuries can be compensated by reinnervation of denervated targets by regenerating injured axons or by collateral branching of undamaged axons, and remodeling of nervous system circuitry related to the lost functions. Plasticity of central connections may compensate functionally for the lack of adequate target reinnervation; however, plasticity has limited effects on disturbed sensory localization or fine motor control after injuries, and may even result in maladaptive changes, such as neuropathic pain and hyperreflexia. After axotomy, neurons shift from a transmitter to a regenerative phenotype, activating molecular pathways that promote neuronal survival and axonal regeneration. Peripheral nerve injuries also induce a cascade of events, at the molecular, cellular, and system levels, initiated by the injury and progressing throughout plastic changes at the spinal cord, brainstem nuclei, thalamus, and brain cortex. Mechanisms involved in these changes include neurochemical changes, functional alterations of excitatory and inhibitory synaptic connections, sprouting of new connections, and reorganization of sensory and motor central maps. An important direction for research is the development of therapeutic strategies that enhance axonal regeneration, promote selective target reinnervation, and are also able to modulate central nervous system reorganization, amplifying positive adaptive changes that improve functional recovery and also reducing undesirable effects.