This study was concerned with the ultrastructural changes that occur in axons and glial cells during peripheral nerve regeneration in the cockroach <i>Periplaneta americana</i>. Metathoracic nerve 5 was cut and regeneration of the proximal stump was studied using electron microscopy. Nerve 5 was surrounded by an acellular layer, the neural lamella. Underneath this structure was a layer of glial cells which formed the perineurium. Lanthanum penetration stopped between the perineurial cell processes, revealing them to be the site of the blood-brain barrier (BBB). Underlying the perineurium were the axons, surrounded by the subperineurial glial cells. Extracellular matrix was present between subperineurial glial processes. After cutting nerve 5, the initial changes in the proximal stump were a result of the degeneration of sensory axons. Haemocytes accumulated outside the nerve and morphologically similar granule-containing (g-c) cells appeared inside the nerve. After the first week signs of regeneration were distinguishable. These included axonal sprouting, glial proliferation and extracellular matrix production. Many small axonal sprouts were formed by regrowing axons. These became grouped into bundles, surrounded by glial processes, as the nerve outgrowth elongated. Glial proliferation by cell division began after the first week, and reached a maximum rate between two and three weeks. It is possible that mitosis of glial cells may be triggered by contact with the sprouting axons. Freeze-fracture studies of the tip of the growing nerve showed that formation of gap and septate unctions took place between the glial cells. This junctional assembly was asynchronous. Reinnervation of the coxal muscles occurred 8 weeks after the nerve was cut. At this stage the nerve was composed of several axonal bundles, each containing large and small axons. The nerve did not completely resemble the control even after 16 to 20 weeks of regeneration. Lanthanum incubation showed that the tracer was again excluded by the perineurial cells, indicating that the BBB of the regrown nerve reappeared at 8 weeks. Glial repair was studied following selective glial disruption using localised application of ethidium bromide. This treatment killed the perineurial and subperineurial glial cells. The repair of the glial system involved the transitory appearance of g-c cells in the nerve. 11 days after ethidium bromide treatment, new glial cells were present and lanthanum was excluded by the perineurial cell layer. Preinjection of microspheres into the haemolymph, which were taken up by phagocytic haemocytes, reduced the numbers of g-c cells that appeared in the nerve after ethidium bromide treatment. This lengthened the time required for glial repair. Cell division of neuroglial cells was observed. Cells derived from haemocytes and glial cell division were probably involved in the replacement of the damaged glial cells after ethidium bromide treatment. This study shows that glial cells play an important role in peripheral nerve regeneration in insects, forming the environment through which the regenerating axons grow.