In contrast to the peripheral nervous system (PNS), little structural and functional regeneration of the central nervous system (CNS) occurs spontaneously following injury in adult mammals. The inability of the CNS to regenerate is mainly attributed to its own inhibitorial environment such as glial scar formation and the myelin sheath of oligodendrocytes. Therefore, one of the strategies to promote axonal regeneration of the CNS is to experimentally modify the environment to be similar to that of the PNS. Schwann cells are the myelinating glial cells in the PNS, and are known to play a key role in Wallerian degeneration and subsequent regeneration. Central nervous system regeneration can be elicited by Schwann cell transplantation, which provides a suitable environment for regeneration. The underlying cellular mechanism of regeneration is based upon the cooperative interactions between axons and Schwann cells involving the production of neurotrophic factors and other related molecules. Furthermore, tight and gap junctional contact between the axon and Schwann cell also mediates the molecular interaction and linking. In this review, the role of the Schwann cell during the regeneration of the sciatic (representing the PNS) and optic (representing the CNS) nerves is explained. In addition, the possibility of optic nerve reconstruction by an artificial graft of Schwann cells is also described. Finally, the application of cells not of neuronal lineage, such as bone marrow stromal cells (MSCs), in nerve regeneration is proposed. Marrow stromal cells are known as multipotential stem cells that, under specific conditions, differentiate into several kinds of cells. The strategy to transdifferentiate MSCs into the cells with a Schwann cell phenotype and the induction of sciatic and optic nerve regeneration are described.