Background: The review highlights recent advancements and innovative uses of nerve transfer surgery in treating dysfunctions caused by central nervous system (CNS) injuries, with a particular focus on spinal cord injury (SCI), stroke, traumatic brain injury, and cerebral palsy. Methods: A comprehensive literature search was conducted regarding nerve transfer for restoring sensorimotor functions and bladder control following injuries of spinal cord and brain, across PubMed and Web of Science from January 1920 to May 2023. Two independent reviewers undertook article selection, data extraction, and risk of bias assessment with several appraisal tools, including the Cochrane Risk of Bias Tool, the JBI Critical Appraisal Checklist, and SYRCLE’s ROB tool. The study protocol has been registered and reported following PRISMA and AMSTAR guidelines. Results: Nine hundred six articles were retrieved, of which 35 studies were included (20 on SCI and 15 on brain injury), with 371 participants included in the surgery group and 192 in the control group. These articles were mostly low-risk, with methodological concerns in study types, highlighting the complexity and diversity. For SCI, the strength of target muscle increased by 3.13 of Medical Research Council grade, and the residual urine volume reduced by more than 100 ml in 15 of 20 patients. For unilateral brain injury, the Fugl-Myer motor assessment (FMA) improved 15.14–26 score in upper extremity compared to 2.35–26 in the control group. The overall reduction in Modified Ashworth score was 0.76–2 compared to 0–1 in the control group. Range of motion (ROM) increased 18.4–80° in elbow, 20.4–110° in wrist and 18.8–130° in forearm, while ROM changed −4.03°−20° in elbow, −2.08°−10° in wrist, −2.26°−20° in forearm in the control group. The improvement of FMA in lower extremity was 9 score compared to the presurgery. Conclusion: Nerve transfer generally improves sensorimotor functions in paralyzed limbs and bladder control following CNS injury. The technique effectively creates a ‘bypass’ for signals and facilitates functional recovery by leveraging neural plasticity. It suggested a future of surgery, neurorehabilitation and robotic-assistants converge to improve outcomes for CNS.