We investigated the efficacy of a muscle-stuffed vein (MSV) seeded with neural-transdifferentiated human mesenchymal stem cells as an alternative nerve conduit to repair a 15-mm sciatic nerve defect in athymic rats. Other rats received MSV conduit alone, commercial polyglycolic acid conduit (Neurotube®), reverse autograft, or were left untreated. Motor and sensory functions as well as nerve conductivity were evaluated for 12 weeks, after which the grafts were harvested for histological analyses. All rats in the treatment groups demonstrated a progressive increase in the mean Sciatic Functional Index (motor function) and nerve conduction amplitude (electrophysiological function) and showed positive withdrawal reflex (sensory function) by the 10th week of postimplantation. Autotomy, which is associated with neuropathic pain, was severe in rats treated with conduit without cells; there was mild or no autotomy in the rats of other groups. Histologically, harvested grafts from all except the untreated groups exhibited axonal regeneration with the presence of mature myelinated axons. In conclusion, treatment with MSV conduit is comparable to that of other treatment groups in supporting functional recovery following sciatic nerve injury; and the addition of cells in the conduit alleviates neuropathic pain. Impact Statement It is shown that pretreated muscle-stuffed vein conduit is comparable to that of commercial nerve conduit and autograft in supporting functional recovery following peripheral nerve injury. The addition of neural-differentiated mesenchymal stem cells in the conduit is shown to alleviate neuropathic pain.