Peripheral nerve injury that causes an extensive tissue loss requires the use of natural and synthetic nerve guides to bridge the healthy segments together. However, the reported clinical functional motor outcomes were inconsistent, suggesting that new strategies must be employed for nerve repair. It is proposed that both soluble and insoluble pro-regeneration cues are to be integrated, in the form of glial cell line derived neurotrophic factor (Gdnf) and basal lamina nanofibers, respectively. A stable Schwann cell line secreting inducible Gdnf, a motor neuron survival and neurite-promoting protein, was established and microencapsulated in barium alginate matrix mixed with the basal lamina-containing matrigel. The viability of cells inside the capsule was found to be > 92% in vitro at 1 month and 58% in the dorsal mouse air pouch model at 2 weeks after implantation. Addition of the inducer led to the increased release of exogenous Gdnf into the extracapsular environment, while withdrawal caused a baseline decrease. Hence, this construct can be used to deliver Gdnf in a controlled fashion to mimic the phase-dependent regulation of Gdnf during nerve healing. In a separate experiment, precipitated basal lamina proteins were electrospun to make fiber layers with nano-dimension thickness similar to the native size of Schwann cell basal lamina to act as an insoluble extracellular matrix scaffold. Culture of embryonic chick ganglia and sciatic nerve segments demonstrated that the fabricated surface supported explant attachment, elongation of neurites, and migration of Schwann cells;​ indicating that the material can be utilized as filler inside the lumen of tubular nerve guides. Together with the locally-secreted Gdnf, the scheme hopes to produce significant improvement of nerve regeneration for normal innervated muscle movement.