Peripheral nerves are exposed to physical injuries usually caused by trauma that may lead to a significant loss of sensory or motor functions and is considered as a serious health problem for societies today. This study was designed to develop a novel nano bioglass/gelatin conduit (BGGC) for the peripheral nerve regeneration. The bioglass nanoparticles were prepared by sol–gel technique and characterized using transmission electron microscopy (TEM), Fourier transform infrared spectroscopy (FTIR) and X-ray diffraction analysis. The interfacial bonding interaction between the nano-bioglass and gelatin in the developed conduits was assessed by FTIR. The surface morphology and pore size of the nanocomposite were investigated through scanning electron microscopy with the pore size of the conduits being 10–40 μm. Biocompatibility was assessed by MTT assay which indicated the BGGC to have good cytocompatibility. The guidance channel was examined and used to regenerate a 10 mm gap in the right sciatic nerve of a male Wistar rat. Twenty rats were randomly divided into two experimental groups, one with the BGGC and the other being normal rats. The gastrocnemius muscle contractility was also examined at one, two and three months post-surgery in all groups using electromyography (EMAP). Histological and functional evaluation and the results obtained from electromyography indicated that at three months, nerve regeneration of the BGGC group was statistically equivalent to the normal group (p > 0.05). Our result suggests that the BGGC can be a suitable candidate for peripheral nerve repair.