Background: Severe peripheral nerve injuries, such as deficits over long distances or proximal nerve trunk injuries, pose complex reconstruction challenges that often result in unfavorable outcomes. An innovative approach to repairing severe peripheral nerve damage involves using conduit suturing for nerve transposition repair. Cylindrical nerve guides are typically unsuitable for nerve transposition repair. Moreover, postsurgical adjuvant treatment is essential to promote the development of axonal lateral sprouts, proximal growth, and the restoration of neurostructure and function. The purpose of this research is to assess the impact of chitosan-based conduits with varying inner diameters on nerve transposition repair when combined with modified formula Radix Hedysari (MFRH). Methods: Using chitosan, we created conduits with varying inner diameters on both ends. These conduits were then utilized to repair the distal common peroneal and tibial nerves in SD rats using the proximal common peroneal nerve. Subsequently, MFRH was employed as a supplementary treatment. The assessment of the repair’s effectiveness took place 16 weeks postsurgery, utilizing a range of techniques, including the neurological nerve function index, neuroelectrophysiological measurements, muscle wet weight, and examination of nerve and muscle histology. Results: The outcomes of our study showed that following 16 weeks of postoperative treatment, MFRH had a significant positive impact on the recovery of neuromotor and nerve conduction abilities. Moreover, there was a significant increase in the ratio of wet weight of muscles, cross-sectional area of muscle fibers, quantity and structure of regenerated myelinated nerve fibers, and the count of neurons. Conclusions: A combination of chitosan-based chitin conduits possessing different inner diameters and MFRH can considerably promote the regeneration and functional recovery of damaged nerves, which in turn enhances nerve transposition repair efficacy.