Collateral sprouting of axons in the peripheral nervous system is a branching outgrowth of new axon terminals from non-injured axons into adjacent denervated regions of target tissue. The initiation of collateral sprouting is probably triggered by the interaction between the factors released by degenerated neural pathways or denervated target tissue, and putative interaction between the injured and noninjured neurons within a dorsal root ganglion (transneuronal mechanism). Sprouting of axons along the neurilemmal tubes of Schwann cells was investigated by an end-to-side anastomosis of a peroneal nerve segment to the intact sural nerve on the hind limb of the rat. In group A, the peroneal nerve segment from the contralateral limb was attached to the sural nerve. None of the nerves on the side of the anastomosis were injured. In group B, the same procedure was used as in group A. In addition, dorso-cutaneous nerves from the L4–L6 spinal segments were cut. Injured neurons were therefore present in the dorsal root ganglia from which axons of the sural nerve arise. The skin of the limb was not denervated. In group C, an end-to-side anastomosis of the peroneal nerve segment from the ipsilateral limb was made on the sural nerve. On the same limb, the saphenus nerve was cut and ligated. The skin around the terminal innervation field of the sural nerve was therefore denervated. The growth of sensory axon sprouts into the anastomosed nerve segments was monitored by the nerve-pinch test. In addition, the number of myelinated axons in the anastomosed nerve cross-sections was counted. Eight weeks after surgery the nerve-pinch test showed no sprouting of the sural nerve into the anastomosed nerve segments of the peroneal nerve in any animal in group A. In contrast, we detected sprouting in all group C animals and in four out of five animals in group B. We found only few myelinated fibres in the anastomosed peroneal nerves in group A. This was statistically significantly less than in groups B and C (p < 0.05). Myelinated fibres in the anastomosed peroneal nerve in group B significantly outnumbered those in group C (p < 0.02). We found out that collateral sprouting cannot be induced by Schwann cell tubes alone, but rather denervated target tissue or transneuronal mechanisms are needed to induce the process. Transneuronal mechanism is an important factor stimulating the initiation of collateral sprouting.