Bacterial cellulose (BC) is a natural biomaterial with unique properties suitable for tissue engineering applications, but it has not yet been used for preparing nerve conduits to repair peripheral nerve injuries. The objectives of this study were to prepare and characterize the Kampuchea-synthesized bacterial cellulose (KBC) and further evaluate the biocompatibility of KBC with peripheral nerve cells and tissues in vitro and in vivo. KBC membranes were composed of interwoven ribbons of about 20–100 nm in width, and had a high purity and the same crystallinity as that of cellulose Iα. The results from light and scanning electron microscopy, MTT assay, flow cytometry, and RT-PCR indicated that no significant differences in the morphology and cell function were observed between Schwann cells (SCs) cultured on KBC membranes and glass slips. We also fabricated a nerve conduit using KBC, which was implanted into the spatium intermusculare of rats. At 1, 3, and 6 weeks post-implantation, clinical chemistry and histochemistry showed that there were no significant differences in blood counts, serum biochemical parameters, and tissue reactions between implanted rats and sham-operated rats. Collectively, our data indicated that KBC possessed good biocompatibility with primary cultured SCs and KBC did not exert hematological and histological toxic effects on nerve tissues in vivo. © 2013 Wiley Periodicals, Inc. J Biomed Mater Res Part A: 102A: 1548–1557, 2014.