Activation of proliferation of Schwann cells is crucial for axonal guidance and successful nerve regeneration following peripheral nerve injury (PNI). Considering melatonin plays an important role in proliferative regulation of central glial cells, the present study determined whether melatonin can effectively promote Schwann cell proliferation and improve nerve regeneration after PNI. The spontaneous immortalized rat Schwann cell line (RSC 96 cells) was first analyzed by quantitative polymerase chain reaction (QPCR) to detect the potential existence of melatonin receptors. The melatonin receptor-mediated signaling responsible for proliferation was examined by measuring the phosphorylation of extracellular signal-regulated kinases (ERK1/2) pathway. The in vivo model of PNI was performed by the end-to-side neurorrhaphy. The quantity of Schwann cells as well as the number of re-innervated motor end plates (MEP) on target muscles was examined to represent the functional recovery of injured nerves. QPCR results indicated that MT1 is the dominant receptor in Schwann cells. Immunoblotting and proliferation assay revealed an enhanced phosphorylation of ERK1/2 and increased number of RSC 96 cells following melatonin administration. Nonselective melatonin receptor antagonist (luzindole) treatment significantly suppressed all the above findings, suggesting that the proliferative effects of melatonin were mediated by a receptor-dependent pathway. In vivo results corresponded well with in vitro findings in which melatonin effectively increased the amount of proliferated Schwann cells and re-innervated MEP on target muscles following PNI. As melatonin successfully improves nerve regeneration by promoting Schwann cell proliferation, therapeutic use of melatonin may thus serve as a promising strategy to counteract the PNI-induced neuronal disability.