Introduction: Peripheral nerve injuries often lead to significant functional impairment. While autografts remain the gold standard for repairing critical-sized nerve defects, donor site morbidity and limited graft availability have prompted the exploration of alternative strategies. Although studies investigating nerve regeneration using nerve conduits and biological agents are present in the literature, research investigating the effect of neurotrophic factors enriched secretome with biocompatible 3D conduits combination is insufficient. The aim of this study is to evaluate the regenerative potential of 3D biodegradable chitosan-PCL nerve conduit combined with BDNF-enriched secretome in peripheral nerve defects. Methods: In this study, biodegradable three-dimensional (3D) nerve conduits composed of polycaprolactone (PCL) and chitosan (75:25 wt/wt) were fabricated and used to bridge 10 mm sciatic nerve defects in rats. The conduits were evaluated alone or in combination with the secretome derived from Wharton's Jelly mesenchymal stem cells (WJ-MSC), either in the native form or enriched with brain-derived neurotrophic factor (BDNF). Thirty-two adult male Wistar Albino rats (mean weight 300–400 g) were randomized into four groups: Autograft (Group 1), conduit only (Group 2), conduit and WJ-MSC derived secretome (Group 3), and conduit combined with BDNF-enriched WJ-MSC derived secretome (Group 4). Functional recovery was assessed using the sciatic functional index (SFI), electromyography (EMG), and gastrocnemius muscle wet weight. Morphological and histological evaluations were performed at 12 weeks postoperatively. Results: At the end of 12 weeks, Group 4 (−49.48 ± 2.82) exhibited significantly improved SFI values compared to Group 2 (−66.62 ± 5.31) and Group 3 (−60.60 ± 5.34) (p < 0.05). Electromyographic analysis revealed higher compound muscle action potential amplitutes in Group 4 (19.72 ± 3.62 mV) than Group 2 and Group 3 (p < 0.05), with values compared to the autograft group. Gasrtrocnemius muscle wet weight ratios were also significantly higher in Group 4 (69.09% ± 9.88%) than in Groups 2 and 3. Histological analyses showed enhanced axonal regeneration, reduced inflammation, and better myelination in Group 4. Scanning electron microscopy confirmed the conduit structural integrity and stability over the 12-week period. Conclusion: The combination of a 3D biodegradable chitosan-PCL conduit with BDNF-enriched WJ-MSC-derived secretome significantly enhanced peripheral nerve regeneration in a rat model. This strategy shows strong potential as an alternative to autografts for treating critical-sized nerve defects.