Limited axon regeneration following peripheral nerve injury may be related to activation of the lysosomal protease, asparaginyl endopeptidase (AEP, δ-secretase) and its degradation of the microtubule associated protein, Tau. Activity of AEP was increased at the site of sciatic nerve transection and repair but blocked in mice treated systemically with a specific AEP inhibitor, compound 11 (CP11). Treatments with CP11 enhanced axon regeneration in vivo. Amplitudes of compound muscle action potentials recorded 4 weeks after nerve transection and repair and 2 weeks after daily treatments with CP11 were double those of vehicle-treated mice. At that time after injury, axons of significantly more motor and sensory neurons had regenerated successfully and reinnervated the tibialis anterior and gastrocnemius muscles in CP11-treated mice than vehicle-treated controls. In cultured adult dorsal root ganglion neurons derived from wild type mice that were treated in vitro for 24 h with CP11, neurites were nearly 50% longer than in vehicle-treated controls and similar to neurite lengths in cultures treated with the TrkB agonist, 7,8-dihydroxyflavone (7,8-DHF). Combined treatment with CP11 and 7,8-DHF did not enhance outgrowth more than treatments with either one alone. Enhanced neurite outgrowth produced by CP11 was found also in the presence of the TrkB inhibitor, ANA-12, indicating that the enhancement was independent of TrkB signalling. Longer neurites were found after CP11 treatment in both TrkB+ and TrkB- neurons. Delta secretase inhibition by CP11 is a treatment for peripheral nerve injury with great potential.