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Localized drug delivery strategies could greatly benefit patients with peripheral nerve injury and could be easy for surgeons to implement. We developed a local drug delivery system (DDS) using drug-loaded poly(lactic-co-glycolic acid) (PLGA) microspheres (MS) embedded in a fibrin gel. In an in vitro study, we investigated the biocompatibility of this DDS by performing a toxicity assay in which we incubated PC-12 cells with the medium released from the DDS in vitro. In an in vivo study, this DDS was applied at the rat common peroneal (CP) nerve injury site to deliver exogenous glial cell line-derived neurotrophic factor (GDNF) to the regenerating axons after delayed nerve repair. In vitro, PC-12 cells incubated with released media samples from the DDS had similar viability to control cells cultured with normal media, demonstrating that the DDS was not toxic. In vivo, the numbers of motor and sensory neurons that regenerated their axons with empty MS treatment were the same as when there was no MS treatment. The DDS increased the numbers of regenerating motor- and sensory neurons to levels indistinguishable from those observed with immediate nerve repair. The DDS increased neuron regeneration to levels double those observed with negative control groups. This biocompatible, nontoxic, fibrin gel-based DDS enhances outcomes following severe peripheral nerve injuries., (© 2015 Wiley Periodicals, Inc.)