One of the most important parts of the body is the peripheral nervous system, and any injuries in this system may result in potentially lethal consequences or severe side effects. The peripheral nervous system may not rehabilitate the harmed regions following disabling disorders, which reduce the quality of life of patients. Fortunately, in recent years, hydrogels have been proposed as exogenous alternatives to bridge damaged nerve stumps to create a useful microenvironment for advancing nerve recovery. However, hydrogel-based medicine in the therapy of peripheral nerve injury still needs a lot of improvement. In this study, GelMA/PEtOx hydrogel was used for the first time to deliver 4-Aminopyridine (4-AP) small molecules. 4-AP is a broad-spectrum potassium channel blocker, which has been demonstrated to increase neuromuscular function in patients with various demyelinating disorders. The prepared hydrogel showed a porosity of 92.2 ± 2.6% after 20 min, swelling ratio of 456.01 ± 2.0% after 180 min, weight loss of 81.7 ± 3.1% after 2 weeks, and good blood compatibility as well as sustainable drug release. MTT analysis was performed to assess the cell viability of the hydrogel and proved that the hydrogel is an appropriate substrate for the survival of cells. In vivo studies were performed for functional analysis and the sciatic functional index (SFI) as well as hot plate latency results showed that the use of GelMA/PEtOx+4-AP hydrogel enhances the regeneration compared to the GelMA/PEtOx hydrogel and the control group.