The biological mechanisms of nerve adaptation to distraction osteogenesis have not yet been elucidated. This study observed response of Schwann cells in the inferior alveolar nerve (IAN) following mandibular lengthening by electron microscopy and immunohistochemistry of S-100 protein, a specific marker of Sehwann cells. Unilateral mandibular distraction (10 mm elongation) was performed in nine young adult goats. Three animals were sacrificed at 7, 14 and 28 days after completion of distraction, respectively. The distracted IAN specimens and control nerves (from the contralateral sides) were harvested and processed for histological, ultrastructural and immunohistochemical examinations: Wallerian degeneration was observed in the distracted IAN, and Signs of axonal regeneration, as well as many activated Schwann cells were seen in the lengthened nerves. The expression of S-100 protein increased significantly at early stage of distraction osteogenesis, but almost returned to the normal level at 28 days after distraction. This study suggests that Wallerian degeneration caused by mechanical stretching may stimulate Schwann cells to enter a proliferated and activated state. Schwann cells and S-100 protein appear to play crucial roles in axonal regeneration that contributes to nerve adaptation to gradual distraction. Therefore, the IAN injury caused by mandibular gradual distraction was not serious; it seems to recover totally through a complicated repair mechanism.