The use of acellular nerve allografts (ANAs) to reconstruct long nerve gaps (>3 cm) is associated with limited axon regeneration. To understand why ANA length might limit regeneration, we focused on identifying differences in the regenerative and vascular microenvironment that develop within ANAs based on their length. A rat sciatic nerve gap model was repaired with either short (2 cm) or long (4 cm) ANAs, and histomorphometry was used to measure myelinated axon regeneration and blood vessel morphology at various timepoints (2-, 4- and 8-weeks). Both groups demonstrated robust axonal regeneration within the proximal graft region, which continued across the mid-distal graft of short ANAs as time progressed. By 8 weeks, long ANAs had limited regeneration across the ANA and into the distal nerve (98 vs. 7583 axons in short ANAs). Interestingly, blood vessels within the mid-distal graft of long ANAs underwent morphological changes characteristic of an inflammatory pathology by 8 weeks post surgery. Gene expression analysis revealed an increased expression of pro-inflammatory cytokines within the mid-distal graft region of long vs. short ANAs, which coincided with pathological changes in blood vessels. Our data show evidence of limited axonal regeneration and the development of a pro-inflammatory environment within long ANAs.