Axonal regeneration succeeds in the peripheral but not central nervous system of adult mammals. Peripheral clearance of myelin coupled with selective CNS expression of axon growth inhibitors, such as Nogo, may account for this reparative disparity. To assess the sufficiency of Nogo for limiting axonal regeneration, we generated transgenic mice expressing Nogo-C in peripheral Schwann cells. Nogo-C includes the panisoform inhibitory Nogo-66 domain, but not a second Nogo-A-specific inhibitory domain, allowing a selective consideration of the Nogo-66 region. The oct-6::nogo-c transgenic mice regenerate axons less rapidly than do wild-type mice after mid-thigh sciatic nerve crush. The delayed axonal regeneration is associated with a decreased recovery rate for motor function after sciatic nerve injury. Thus, expression of the Nogo-66 domain by otherwise permissive myelinating cells is sufficient to hinder axonal reextension after trauma.