β-Site amyloid precursor protein (APP) cleaving enzyme 1 (BACE1) is an aspartyl protease best known for its role in generating the amyloid-β peptides that are present in plaques of Alzheimer's disease. BACE1 has been an attractive target for drug development. In cultured embryonic neurons, BACE1-cleaved N-terminal APP is further processed to generate a fragment that can trigger axonal degeneration, suggesting a vital role for BACE1 in axonal health. In addition, BACE1 cleaves neuregulin 1 type III, a protein critical for myelination of peripheral axons by Schwann cells during development. Here, we asked whether axonal degeneration or axonal regeneration in adult nerves might be affected by inhibition or elimination of BACE1. We report that BACE1 knock-out and wild-type nerves degenerated at a similar rate after axotomy and to a similar extent in the experimental neuropathies produced by administration of paclitaxel and acrylamide. These data indicate N-APP is not the sole culprit in axonal degeneration in adult nerves. Unexpectedly, however, we observed that BACE1 knock-out mice had markedly enhanced clearance of axonal and myelin debris from degenerated fibers, accelerated axonal regeneration, and earlier reinnervation of neuromuscular junctions, compared with littermate controls. These observations were reproduced in part by pharmacological inhibition of BACE1. These data suggest BACE1 inhibition as a therapeutic approach to accelerate regeneration and recovery after peripheral nerve damage.