Nerve injury represents a major cause of disability. In the peripheral nervous system, nerves have the capacity to regrow but within weeks after injury, it is impossible to clarify whether proper regeneration is under way or is failing. In this experimental study, we report on a novel tool to assess nerve outgrowth in vivo. After systemic application, the novel gadolinium-based magnetic resonance (MR) contrast agent Gadofluorine M (Gf) selectively accumulated and persisted in nerve fibers undergoing Wallerian degeneration causing bright contrast on T1-weighted MR images. Gf enhancement on MR imaging was present already at 48 hours within the entire nerve segments undergoing Wallerian degeneration, and subsequently disappeared from proximal to distal parts in parallel to regrowth of nerve fibers. Most importantly, Gf enhancement persisted in nonregenerating, permanently transected nerves. Our novel Gf-based MR imaging methodology holds promise for clinical use to bridge the diagnostic gap between nerve injury and completed nerve regeneration, and to determine the necessity for neurolysis and engraftment if spontaneous regeneration is not successful.