During peripheral nerve regeneration, new Schwann cells take origin from primitive reticulo-endothelial cells around blood vessels in the epineurium and in endoncurium. These cells proliferate and migrate to form the mesenchymal cells of the “union scar”. Regenerating axons invade the scar and are soon engulfed by the mesenchymal cells. Cytological differentiation from an undifferentiated mesenchymal cell towards a Schwann cell takes place after the entrance of an axon into the cytoplasm. The direction and course of the regenerating axon is determined by the primitive mesenchymal cells of the granulation tissue. The latter exhibit a high degree of affinity for the new axons and provide mechanical support for the regenerating axons.