Local administration of FK506, an FDA approved immunosuppressant with neuroregenerative properties, is a promising technique to achieve improved peripheral nerve regeneration while preventing the side effects associated with the systemic administration of this drug. Although considerable research has been devoted to the development of clinically suitable systems for local delivery of FK506 to the site of nerve injury and repair, the optimal dose of FK506 for enhancement of axon regeneration in the peripheral nerve has not yet been established. To this end, we devised a three-dimensional (3D) organotypic assay capable of mimicking the peripheral nerve. This assay consisted of a neonatal rat dorsal root ganglion (DRG) extending its neurites into the native peripheral nerve scaffold provided by an acellular nerve allograft (ANA). A novel 3D compartmented cell culture system was adapted from the 3D organotypic assay to achieve local delivery of FK506 just to the growing neurites in vitro and establish the required local dose of FK506 for peripheral nerve regeneration. A bimodal dose response was observed by culturing the entire DRG-ANA construct with media containing different concentrations of FK506. Low drug concentration of 1 pg/ml and high drug concentration of 100 ng/ml lead to the longest neurite extension in vitro. Furthermore, regardless of the FK506 concentration, concentrating the drug to the growing neurites resulted in significant increase in both neurite extension and neurite density, an effect that was not observed with the FK506 delivery to both neurites and neural cell bodies within DRG. The findings in this study provide valuable insight into the optimal local dose of FK506 for peripheral nerve regeneration. Furthermore, for the first time, this study suggests the potential interaction of FK506 with axons at the level of the growth cone.