Introduction Peripheral nerve injury (PNI) often leads to significant functional loss in patients and poses a challenge to physicians since treatment options for improving functional outcomes are limited. Recent studies suggest that erythropoietin and glucocoticoids have beneficial effects as mediators of neuro-regenerative processes. We hypothesized that combination treatment with erythropoietin and glucocoticoids would have a synergistic effect on functional outcome after PNI. Materials and methods Sciatic nerve crush injury was simulated in ten-week-old male C57BL/6 mice. The mice were divided into four groups according to the type of drugs administered (control, erythropoietin, dexamethasone, and erythropoietin with dexamethasone). Motor functional recovery was monitored by walking track analysis at serial time points up to 28 days after injury. Morphological analysis of the nerve was performed by immunofluorescent staining for neurofilament (NF) heavy chain and myelin protein zero (P0) in cross-sectional and whole-mount nerve preparations. Additionally, morphological analysis of the muscle was performed by Hematoxylin and eosin staining. Results Combination treatment with erythropoietin and dexamethasone significantly improved the sciatic functional index at 3, 7, 14, and 28 days after injury. Fluorescence microscopy of cross sectional nerve revealed that the combination treatment increased the ratio of P0/NFexpressing axons. Furthermore, confocal microscopy of the whole-mount nerve revealed that the combination treatment increased the fluorescence intensity of P0 expression. The cross-sectional area and minimum Feret’s diameter of the muscle fibers were significantly larger in the mice which received combination treatment than those in the controls. Conclusion Our results demonstrated that combination treatment with erythropoietin and dexamethasone accelerates functional recovery and reduces neurogenic muscle atrophy caused by PNI in mice, which may be attributed to the preservation of myelin and Schwann cell re-myelination. These findings may provide practical therapeutic options for patients with acute PNI.