OBJECTIVE: To review the advance in materials of nerve conduit and Schwann cell transplantation for preparation of artificial nerve with tissue engineering technique. METHODS: Recent literatures about artificial nerve, nerve conduit and Schwann cell transplantation were extensively reviewed. RESULTS: Many biomaterials such as silicon, dacron, expanded polytetrafluoroethylene(ePTFE), polyester and chitin could be used as nerve conduits to repair nerve defect, the degradable biomaterials were better. The nerve conduit with intrinsic filaments could be used to bridge an extended gap in peripheral nerve. Purified and cultured Schwann cells were still bioactive. Axonal regeneration could be enhanced after implantation of Schwann cells into nerve conduit. CONCLUSION: The ideal artificial nerve is composed of three dimensional biodegradable nerve conduit and bioactive Schwann cells, Schwann cells can be distributed in nerve conduit just like Bünger’s band.