Following intrahypothalamic transection of the hypothalamo-neurohypophysial tract, spongostan was inserted into the transection site. Implants were imbibed with a variety of fluids, one of which contained a putative pituicyte-derived neurotrophic substance. After 20 days, sparse regeneration of neurosecretory axons was observed in all cases; thus, the putative neurotrophic substance failed to enhance regeneration into the implants. Fascicles of neurosecretory axons had regenerated into the spaces of the spongostan implants. Some fascicles paralleled continuous capillaries that had penetrated the implants. Fascicles were always accompanied by basal lamina-enclosed astrocytes. At sites of direct contact between axons and the basal lamina, clusters of microvesicles were present, suggestive of hormone release.