Purpose: Repairing the spinal cord with peripheral nerve grafts (PNG) and adjuvant acidic fibroblast growth factor (FGF1) has previously resulted in partial functional recovery. To aid microsurgical placement of PNGs, a graft holder device was previously developed by our group. In hope for a translational development we now investigate a new biodegradable graft holder device containing PNGs with or without FGF1. Methods: Rats were subjected to a T11 spinal cord resection with subsequent repair using twelve white-to-grey matter oriented PNGs prepositioned in a biodegradable device with or without slow release of FGF1. Animals were evaluated with BBB-score, electrophysiology and immunohistochemistry including anterograde BDA tracing. Results: Motor evoked potentials (MEP) in the lower limb reappeared at 20 weeks after grafting. MEP responses were further improved in the group treated with adjuvant FGF1. Reappearance of MEPs was paralleled by NF-positive fibers and anterogradely traced corticospinal fibers distal to the injury. BBB-scores improved in repaired animals. Conclusions: The results continue to support that the combination of PNGs and FGF1 may be a regeneration strategy to reinnervate the caudal spinal cord. The new device induced robust MEPs augmented by FGF1, and may be considered for translational research.