The perineurium of peripheral nerve plays important roles in anatomical organization of fiber groups, in endoneurial fluid homeostasis and in maintenance of tensile strength but little is known about the functional and structural alterations of the perineurium with injury. Large arteries of supply to lower limb of Sprague-Dawley rats were ligated to study the structural reactions of perineurium at 36 h and at 7 days after induction of ischemic injury. Lipid droplets were found to be an early reactive change to ischemia in multiple cell types including perineurial, endothelial and Schwann cells. In peripheral nerve levels showing early myelinated fiber injury the inner perineurial sheath was widened and was undergoing degeneration. The inner layers of perineurial cells showed swelling, organelle disruption and membrane dissolution while outer layers remained intact. Inner perineurial cell degeneration is a prominent early feature of ischemic injury and may be an important mechanism of altered endoneurial homeostasis, fiber function and structure.