Peripheral nerve injury is a challenging orthopedic issue in clinical management that often leads to limb dysfunction or even disability in severe cases. A thorough exploration of the repair process of peripheral nerve injury and the underlying mechanism contributes to formulate more effective therapeutic strategies. In the present study, we established a sciatic nerve transection injury model in Sprague-Dawley (SD) rats. A 12-week compensatory repair of sciatic nerve transection injury using a chitin cannula for small gap anastomosis was then performed via sleeve jointing the proximal common peroneal nerve to the distal tibial nerve and common peroneal nerve, with a 2 mm interval. Compensatory repair via small gap amplification was observed via gross observation of nerve specimen, osmic acid staining, and electrophysiological stimulation of sciatic nerve branches of the tibial and common peroneal nerve. Rat limbs were observed, and the functional recovery of effector muscles of the gastrocnemius and tibialis anterior muscles was assessed through weighing the muscle wet weight, Hematoxylin and Eosin (H&E) staining, and muscle strength detection. H&E staining, Masson staining, and toluidine blue staining were performed to observe the morphological changes of the dorsal root ganglion. Positive expressions of key proteins involved in the Phosphatase and tensin homologue deleted on chromosome ten (PTEN)-protein kinase B (AKT)/mammalian target of rapamycin (mTOR) signaling pathway, including PTEN, AKT, mTOR, Toll-like receptor 4 (TLR4), and Caspase9 in the dorsal root ganglion during compensatory repair of sciatic nerve after injury via small gap amplification, were detected by immunohistochemical staining. It is found that the compensatory repair of sciatic nerve transection injury using a chitin cannula for small gap anastomosis via sleeve jointing effectively restored the continuity, number of myelinated nerve fibers, and nerve conduction velocity. It promoted toe abduction recovery, improved muscle fiber morphology and increased the wet weight and muscle strength of the gastrocnemius muscle and tibialis anterior muscle. Moreover, it increased the number of neurons and nerve fibers, and improved their morphology. Downregulated PTEN, TLR4, and Caspase9 in the dorsal root ganglia and upregulated AKT and mTOR were observed after small gap amplification than those of the transection injury group, which were closer to those of the control group. Compensatory repair of sciatic nerve transection injury using a chitin cannula for small gap anastomosis via sleeve jointing can restore the morphology and function of the sciatic nerve, effector muscles, and corresponding dorsal root ganglia by activating the PTEN-AKT/mTOR signaling pathway in the dorsal root ganglia. Our findings provide novel therapeutic targets for peripheral nerve injuries.