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Abstract Background Traumatic peripheral nerve injury (TPNI) is a major medical problem with no universally accepted pharmacologic treatment. We hypothesized that encapsulation of pro-angiogenic erythropoietin (EPO) in amphiphilic PLGA-PEG block copolymers could serve as a local controlled-release drug delivery system to enhance neurovascular regeneration after nerve injury. Methods In this study, we synthesized an EPO-PLGA-PEG block copolymer formulation. We characterized its physiochemical and release properties and examined its effects on functional recovery, neural regeneration, and blood vessel formation after sciatic nerve crush injury in mice. Results EPO-PLGA-PEG underwent solution-to-gel transition within the physiologically relevant temperature window and released stable EPO for up to 18 days. EPO-PLGA-PEG significantly enhanced sciatic function index (SFI), grip strength, and withdrawal reflex post-sciatic nerve crush injury. Furthermore, EPO-PLGA-PEG significantly increased blood vessel density, number of junctions, and myelinated nerve fibers after injury. Conclusion This study provides promising preclinical evidence for using EPO-PLGA-PEG as a local controlled-release treatment to enhance functional outcomes and neurovascular regeneration in TPNI.