The mature peripheral nervous system (PNS) generally shows better regeneration of injured axons as opposed to the central nervous system (CNS). However, complete functional recovery is rarely achieved even in the PNS although morphologically good axonal regeneration often occurs. This mainly results from aberrant reinnervation due to extensive branching of cut axons with consequent failure of synchronized movements of the muscles. Myelin-associated glycoprotein (MAG), a well-characterized molecule existing both in the CNS and PNS myelin, is considered to be a potent inhibitor of axonal regeneration especially in the CNS. In the present study, we investigated whether MAG has any effects not only on axonal elongation, but also on axonal branching. We show herein that MAG minimized branching of the peripheral axons both in vitro and in vivo via activation of RhoA. Furthermore, after sciatic nerve transection in rats, focal and temporary application of MAG to the lesion dramatically enhanced the functional recovery. Using double retrograde labeling and preoperative/postoperative labeling of spinal neurons, reduced hyperinnervation and improved accuracy of target reinnervation was confirmed, respectively. In conclusion, as MAG significantly improves the quality of axonal regeneration, it can be used as a new therapeutic approach for peripheral nerve repair with possible focal and temporary application.