The acceleration of nerve regeneration remains a clinical challenge. We previously demonstrated that transcutaneous CO2 application using a novel hydrogel increases the oxygen concentration in local tissue via an “artificial Bohr effect” with the potential to prevent muscle atrophy. In this study, we investigated the effect of transcutaneous CO2 administration on limb function after peripheral nerve injury in a rat sciatic nerve injury model. In total, 73 Sprague-Dawley rats were divided into a sham group, a control group (crush injury to sciatic nerve and no treatment) or a CO2 group (crush injury with transcutaneous CO2 application). CO2 was administered percutaneously for 20 min five times per week. Scores for the sciatic function index and pinprick test were significantly higher in the CO2 group than control group. The muscle wet weight ratios of the tibialis anterior and soleus muscles were higher in the CO2 group than control group. Electrophysiological examination showed that the CO2 group had higher compound motor action potential amplitudes and shorter distal motor latency than the control group. Histological examination of the soleus muscle sections at postoperative week 2 showed shorter fiber diameter in the control group than in the CO2 group. The mRNA expression of Atrogin-1 and MuRF-1 was lower, mRNA expression of VEGF and myogenin and MyoD was higher in CO2 group at postoperative week 2 compared to the control group.