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Outcomes following peripheral nerve injury remain frustratingly poor. The reasons for this are multifactorial, although maintaining a growth permissive environment in the distal nerve stump following repair is arguably the most important. The optimal environment for axonal regeneration relies on the synthesis and release of many biochemical mediators that are temporally and spatially regulated with a high level of incompletely understood complexity. The Schwann cell (SC) has emerged as a key player in this process. Prolonged periods of distal nerve stump denervation, characteristic of large gaps and proximal injuries, have been associated with a reduction in SC number and ability to support regenerating axons. Cell based therapy offers a potential therapy for the improvement of outcomes following peripheral nerve reconstruction. Stem cells have the potential to increase the number of SCs and prolong their ability to support regeneration. They may also have the ability to rescue and replenish populations of chromatolytic and apoptotic neurons following axotomy. Finally, they can be used in non-physiologic ways to preserve injured tissues such as denervated muscle while neuronal ingrowth has not yet occurred. Aside from stem cell type, careful consideration must be given to differentiation status, how stem cells are supported following transplantation and how they will be delivered to the site of injury. It is the aim of this article to review current opinions on the strategies of stem cell based therapy for the augmentation of peripheral nerve regeneration.