Massive of macrophages are recruited to the injured nerve to remove the axonal and myelin debris for creating a conducive micro-environment for nerve regeneration. However, the fate of macrophages after the debris clearing remains unclear. In this study, we demonstrated that the number of macrophages in the crush injured sciatic nerve of mice peaked at 7 days post injury (dpi) and then decreased significantly in the late stage of nerve injury. Mechanismly, the macrophage elimination was primarily attributed to TGF-β/Smad3 signaling dependent macrophage-myofibroblast transition (MMT), rather than apoptosis or out-migration. Furthermore, MMT caused collagen deposition is conducive to nerve regeneration. Both macrophage depletion via clodronate liposomes and MMT blockade using TGF-β/Smad3 inhibitor significantly reduced collagen deposition and impaired functional nerve regeneration. In summary, the present study indicates that TGF-β/Smad3 regulated MMT contributes to macrophage elimination and functional recovery in the injury nerve.