When a nerve is cut, either healing or permanent interruption of the neural pathways occurs. The final outcome depends on the severity of the injury and on its treatment.

Several degenerative changes result when a nerve is cut. Within about 3 to 5 days, the axons in the part of the nerve distal to the cut break into irregular segments and degenerate. This occurs because the neuron cell body produces the substances essential to maintain the axon and these substances have no way of reaching parts of the axon distal to the point of damage. Eventually the distal part of the axon completely degenerates. At the same time the axons are degenerating, the myelin part of the neurolemmocytes around them also degenerates, and macrophages invade the area to phagocytize the myelin. The neurolemmocytes then enlarge, undergo mitosis, and finally form a column of cells along the regions once occupied by the axons. The columns of neurolemmocytes are essential for the growth of new axons. If the ends of the regenerating axons encounter a neurolemmocyte column, their rate of growth increases, and reinnervation of peripheral structures is likely. If the ends of the axons do not encounter the columns, they fail to reinnervate the peripheral structures. The part of the axon proximal to the cut degenerates for a distance up to several neurolemmocytes in length and then begins regenerative processes that lead to growth from the end of the severed axons. The end of each regenerating axon forms bulbous enlargements and several axonal sprouts. It normally takes about 2 weeks for the axonal sprouts to grow across the scar that develops in the area in which the nerve was cut and to enter the neurolemmocyte columns. However, only one of the sprouts from each severed neuron forms an axon. The other branches degenerate. After the axons grow through the neurolemmocyte columns, new myelin sheaths are formed, and the neurons reinnervate the structures they previously supplied.

Treatment strategies that increase the probability of reinnervation include bringing the ends of the severed nerve close together surgically. In some cases in which sections of nerves are destroyed as a result of trauma, nerve transplants are performed to replace damaged segments. The transplanted nerve eventually degenerates, but it does provide neurolemmocyte columns through which axons can grow.

Regeneration of damaged nerve tracts within the CNS is very limited and is poor in comparison to regeneration of nerves in the PNS. In part the difference may result from the oligodendrocytes, which exist only in the CNS. Each oligodendrocyte has several processes, each of which forms part of a myelin sheath. The cell bodies of the oligodendrocytes are a short distance from the axons they ensheathe, and there are fewer oligodendrocytes then neurolemmocytes. Consequently, when the myelin degenerates following damage, no column of cells remains in the CNS to act as a guide for the growing axons.