Reliably interfacing a nerve with an electrode array is one of the approaches to restore motor and sensory functions after an injury to the peripheral nerve. Accomplishing this with current technologies is challenging as the electrode-neuron interface often degrades over time, and surrounding myoelectric signals contaminate the neuro-signals in awake, moving animals. The purpose of this study was to evaluate the potential of microchannel electrode implants to monitor over time and in freely moving animals, neural activity from regenerating nerves. We designed and fabricated implants with silicone rubber and elastic thin-film metallization. Each implant carries an eight-by-twelve matrix of parallel microchannels (of 120 × 110 μm(2) cross-section and 4 mm length) and gold thin-film electrodes embedded in the floor of ten of the microchannels. After sterilization, the soft, multi-lumen electrode implant is sutured between the stumps of the sciatic nerve. Over a period of three months and in four rats, the microchannel electrodes recorded spike activity from the regenerating sciatic nerve. Histology indicates mini-nerves formed of axons and supporting cells regenerate robustly in the implants. Analysis of the recorded spikes and gait kinematics over the ten-week period suggests firing patterns collected with the microchannel electrode implant can be associated with different phases of gait.