This study proposes a biodegradable nerve conduit containing genipin-cross-linked gelatin annexed with tricalcium phosphate ceramic particles (genipin-gelatin-tricalcium phosphate, GGT) in peripheral nerve regeneration. Firstly, cytotoxicity tests revealed that the GGT-extracts were not toxic, and promoted the proliferation and neuronal differentiation of adipose tissue-derived stem cells (ADSCs). Secondly, the GGT composite film effectively supported ADSCs attachment and growth. Additionally, the GGT substrate was biocompatible with the neonatal rat sciatic nerve and produced a beneficial effect on peripheral nerve repair through in vitro tissue culture. Finally, the experiments in this study confirmed the effectiveness of a GGT/ADSCs nerve conduit as a guidance channel for repairing a 10-mm gap in a rat sciatic nerve. Eight weeks after implantation, the mean recovery index of compound muscle action potentials (CMAPs) was significantly different between the GGT/ADSCs and autografts groups (p < 0.05), both of which were significantly superior to the GGT group (p < 0.05). Furthermore, walking track analysis also showed a significantly higher sciatic function index (SFI) score (p < 0.05) and better toe spreading development in the GGT/ADSCs group than in the autograft group. Histological observations and immunohistochemistry revealed that the morphology and distribution patterns of nerve fibers in the GGT/ADSCs nerve conduits were similar to those of the autografts. The GGT nerve conduit offers a better scaffold for the incorporation of seeding undifferentiated ADSCs, and opens a new avenue to replace autologous nerve grafts for the rapid regeneration of damaged peripheral nerve tissues and an improved approach to patient care. © 2011 Wiley Periodicals, Inc. J Biomed Mater Res Part A:, 2012.