Neural injury leads to tissue damage beyond that caused by the initial lesion, mainly as a result of a chain of autodestructive events triggered by the trauma. These events apparently include the activation of immune-derived cells and their products, as treatment with anti-inflammatory agents, such as corticosteroids, limits the damage and thus improves recovery. On the other hand, immune-derived substances, such as cytokines, are thought to play an important role in post-traumatic axonal regeneration. Thus, the need to reduce inflammation to limit the spread of damage appears to be in conflict with the need to permit inflammation to promote regeneration. Comprehension and resolution of this apparent conflict may lead to the development of treatment protocols aimed at rescuing axons spared by the initial injury, without hampering the potential regeneration of directly and indirectly injured axons. In this study, carried out on rats with crushed optic nerves, daily intraperitoneal injections of dexamethasone commencing prior to the injury significantly attenuated the injury-induced decrease in electrophysiological activity and reduced the area of tissue damage. On the other hand, dexamethasone treatment reduced the permissiveness of the injured nerves to neural adhesion and regrowth in vitro. This latter phenomenon was also observed in injured peripheral nerves. Results are discussed with respect to the possible establishment of an appropriate protocol for corticosteroid treatment of nerve injuries aimed at promoting neuronal rescue without compromising neuronal regeneration.