Optimal levels of functional recovery in peripheral nerve injuries remain elusive due to the architectural complexity of the neuronal environment. Commercial nerve repair conduits lack essential guidance cues for the regenerating axons. In this study, the regenerative potential of a biosimulated nerve repair system providing three types of regenerative cues was evaluated in a 10 mm sciatic nerve-gap model over 4 weeks. A thermo-ionically crosslinked gellan-xanthan hydrogel conduit loaded with electrospun PHBV-magnesium oleate-N-acetyl-cysteine (PHBV-MgOl-NAC) nanofibers was assessed for mechanical properties, nerve growth factor (NGF) release kinetics and PC12 viability. In vivo functional recovery was based on walking track analysis, gastrocnemius muscle mass and histological analysis. As an intraluminal filler, PHBV-MgOl-NAC nanofibers improved matrix resilience, deformation and fracture of the hydrogel conduit. NGF release was sustained over 4 weeks, governed by Fickian diffusion and Case-II relaxational release for the hollow conduit and the nanofiber-loaded conduit, respectively. The intraluminal fibers supported PC12 proliferation by 49% compared to the control, preserved up to 43% muscle mass and gradually improved functional recovery. The combined elements of physical guidance (nanofibrous scaffolding), chemical cues (N-acetyl-cysteine and magnesium oleate) and therapeutic cues (NGF and diclofenac sodium) offers a promising strategy for the regeneration of severed peripheral nerves.