Fibrin plays an important role in wound healing and regeneration, and enjoys widespread use in surgery and tissue engineering. The enzymatic activity of Factor XIIIa was employed to covalently incorporate exogenous bioactive peptides within fibrin during coagulation. Fibrin gels were formed with incorporated peptides from laminin and N-cadherin alone and in combination at concentrations up to 8.2 mol peptide per mole of fibrinogen. Neurite extension in vitro was enhanced when gels were augmented with exogenous peptide, with the maximal improvement reaching 75%. When this particular fibrin derivative was evaluated in rats in the repair of the severed dorsal root within polymeric tubes, the number of regenerated axons was enhanced by 85% relative to animals treated with tubes filled with unmodified fibrin. These results demonstrate that it is possible to enhance the biological activity of fibrin by enzymatically incorporating exogenous oligopeptide domains of morphoregulatory proteins.