Our long-term goal is to develop an artificial implant as a conduit for axonal regeneration after peripheral nerve injury. In this study, biodegradable, aligned poly-epsilon-caprolactone (PCL) and collagen/PCL (C/PCL) nanofibers designed as guidance structures were produced by electrospinning and tested in cell culture assays. We compared fibers of 100% PCL with fibers consisting of a 25:75% C/PCL blend. To test their biocompatibility, assays of cell adhesion, survival, migration, effects on cell morphology, axonal growth and axonal guidance were performed. Both types of eletrospun fibers supported oriented neurite outgrowth and glial migration from dorsal root ganglia (DRG) explants. Schwann cell migration, neurite orientation, and process formation of Schwann cells, fibroblasts and olfactory ensheathing cells were improved on C/PCL fibers, when compared to pure PCL fibers. While the velocity of neurite elongation from DRG explants was higher on PCL fibers, analysis of isolated sensory neurons showed significantly better axonal guidance by the C/PCL material. The data demonstrate that electrospun fibers composed of a collagen and PCL blend represent a suitable substrate for supporting cell proliferation, process outgrowth and migration and as such would be a good material for artificial nerve implants.