Objective/Hypothesis: Processed nerve allografts provide a promising alternative to nerve autografts with the advantages of a readily available unlimited supply, no donor site morbidity, and without the need for immunosuppression. The nerve allografts currently available for clinical use do not provide satisfactory results. The processing technique was optimized to reduce the allografts immunogenicity and cellular debris while maintaining the ultrastructural properties. The aim of this study was to evaluate the functional recovery after reconstruction of a long nerve gap using the optimized nerve allograft in a rabbit model. To study the influence of storage techniques on functional recovery, processed nerve allografts were either cold or frozen stored. The nerve allografts were challenged to the gold standard, the nerve autograft. Materials and Methods: Nerve allografts were decellularized using our optimized protocol and stored at either 4°C or −80°C. In 36 New Zealand White rabbits, a 3-cm peroneal nerve gap was repaired with either a cold or frozen stored processed nerve allograft or a nerve autograft (control). Nerve recovery was longitudinally evaluated with ultrasound measurements performed prior to surgery and at 10, 16, and 24 weeks follow-up. Functional motor recovery was determined 24 weeks postoperatively using electrophysiology (compound muscle action potentials [CMAP]), isometric tetanic force (ITF), wet muscle weight (MW), and histomorphometry. Results: The longitudinal ultrasound measurements showed that the cold stored nerve allograft provides faster and earlier regeneration than the frozen stored nerve allograft. At 24 weeks, the cold stored allograft showed equal results compared with the autograft based on ultrasound measurements. Ultrasound furthermore showed significantly impaired recovery in the frozen stored allograft group compared with both the cold stored allograft and autograft (P < .05). The functional outcome measurements, MV and ITF, both showed that the cold stored allograft proved to have a similar result compared with the autograft (P > .05 for both MW and ITF, respectively). The frozen stored allograft, however, had a significantly inferior result to the autograft (P < .05 for both MW and ITF). The CMAP and histomorphometry results showed no significant differences between all 3 groups. Conclusions: Nerve reconstruction with the cold stored optimized nerve allograft results in successful recovery of a long motor nerve defect in a rabbit model, statistically equivalent to the gold standard nerve autograft. Freeze storage of the processed allograft impairs the functional outcome.