Basic fibroblast growth factor (bFGF) plays a crucial role in the regeneration of peripheral nerve defects by affecting nerve cells, Schwann cells and fibroblasts, and by promoting axon outgrowth from the proximal nerve stump. However, the use of exogenous bFGF for in vivo regeneration of the peripheral nerves is limited by its short in vivo half-life. In this study, a drug delivery system for bFGF was developed that uses acidic gelatin hydrogel, which sustainably released bFGF in vivo over several weeks; its ability to promote peripheral nerve regeneration was also examined. In 8-week-old Lewis rats, 7-mm gaps were made in the buccal branch of the left facial nerve. Acidic gelatin hydrogel microspheres (10 µl) with or without bFGF (50 µg) were infused into a 10 mm silicone tube using a micropipette, and the silicone tube was then implanted into the gap. A 1-mm long nerve stump was inserted into each end of the tube. Histological examination at 7 weeks after implantation revealed (1) a significantly increased rate of nerve regeneration, (2) inducement of a number of regenerating nerve axons, and (3) a better degree of maturation of nerve axons in the bFGF microsphere group than that in the bFGF-free microsphere group. Copyright © 2014 John Wiley & Sons, Ltd.