Several disease-modulatory FDA-approved drugs are being used in patients with neurodegenerative diseases. However, information on their toxicity-related profiles is very limited. Therefore, measurement of drug toxicity is essential to increase the knowledge of their side effects. This study aimed to identify compounds that can modulate M-cell regeneration by causing neuro-protection and -toxicity. Here, we developed a simple and efficient in vivo assay using Tg (hsp: Gal4FF62A; UAS: nfsB-mCherry) transgenic zebrafish larvae. Interestingly, via the phenotype-based drug screening approach, we rapidly investigated 1,260 compounds from the United States drug collection and validated these in large numbers, including 14 compounds, that were obstructing this regeneration process. Next, 4 FDA-approved drugs out of 14 compounds were selected as the lead hits for in silico analysis to clarify their binding patterns with PTEN and SOCS3 signaling due to their significant potential in the inhibition of axon regeneration. Molecular docking studies indicated good binding affinity of all 4 drugs with the respective signaling molecules. This may point to PTEN and SOCS3 as the signaling molecules responsible for reducing axon regeneration. Moreover, the acute effect of compounds in reducing M-cell regeneration delineated their toxic effect. In conclusion, our in vivo along with in silico screening strategy will promote the rapid translation of new therapeutics to improve knowledge of the toxicity profile of approved/non-approved drugs efficiently.