In order to test the hypothesis that neurosecretory axon regeneration occurs only in the presence of specific vascular, perivascular, and glial microenvironments, isografts of neural lobe and optic nerve and autografts of sciatic nerve were transplanted into the hypothalamo‐neurohypophysial tract at the lateral retrochiasmatic area of adult male rats. The integrity of the blood‐brain barrier (BBB) to intravenously administered horseradish peroxidase (HRP), the regenerative process of neurosecretory axons, and functional recovery from lesion‐induced diabetes insipidus were analyzed at 18 hr, 36 hr, 10 days, 30 days, and 80 days postsurgery. Neurophysin‐positive axons invaded all grafts, as well as perivascular spaces of the adjacent hypothalamus. Wherever neurosecretory axon regeneration occurred, the BBB was breached. Reestablishment of the BBB was paralleled by a decrease in both density and staining intensity of regenerated neurophysin‐positive axons. These observations illustrate that neurosecretory axon regeneration is tributary of the absence of BBB. It is speculated that blood‐borne factors, provided when the BBB is breached, initiate and sustain neurosecretory axon regeneration. In addition, products of glial elements may enhance or complement the above stimulatory processes. J. Neurosci. Res. 47:173–185, 1997. © 1997 Wiley‐Liss, Inc.