Peripheral nerves are more prone to damage during trauma. Though nerve grafts are used as an alternative method in treating it, the results are purely ambiguous. One such modern approach to treat peripheral nerve injury is bone marrow differentiated neuronal cells. Our present aim is to study the effect of in-vitro differentiated bone marrow mesenchymal stem cells (BMSCs) in the treatment of peripheral nerve injury in rats. Six weeks old rat weighing 80 gm was used for isolation and culture of BMSCs. The second passage cells were taken for neuronal differentiation. Flow cytometry and immunocytochemistry were performed with Anti goat IgG antibody indirectly conjugated with FITC to express nestin. In vitro differentiated BMSC along with PLGA Scaffold is injected into the site of peripheral nerve injury and the results were studied by ENMG, microdissection, and histopathology. The cells were expressed with Nestin goat polyclonal antibody. At the end of the second week, the rat reveals increased amplitude (8.3 mv) with decreased latency (0.8 ms) of the peripheral nerve. Micro dissection confirms the neuronal continuity of the injured peripheral nerve. Histopathology distinctly exhibit increased myelination and decreased endoneuronal space. In conclusion, neuronal differentiated BMSC, regenerate peripheral nerve injury faster than conventional methods and can be applied as an alternate therapy in peripheral nerve repair.