Neuroprostheses interfaced with transected peripheral nerves are technological routes to control robotic limbs as well as convey sensory feedback to patients suffering from traumatic neural injuries or degenerative diseases. To maximize the wealth of data obtained in recordings, interfacing devices are required to have intrafascicular resolution and provide high signal-to-noise ratio (SNR) recordings. In this paper, we focus on a possible building block of a three-dimensional regenerative implant: a polydimethylsiloxane (PDMS) microchannel electrode capable of highly sensitive recordings in vivo. The PDMS 'micro-cuff' consists of a 3.5 mm long (100 mu m x 70 mu m cross section) microfluidic channel equipped with five evaporated Ti/Au/Ti electrodes of sub-100 nm thickness. Individual electrodes have average impedance of 640 +/- 30 k Omega with a phase angle of -58 +/- 1 degrees at 1 kHz and survive demanding mechanical handling such as twisting and bending. In proof-of-principle acute implantation experiments in rats, surgically teased afferent nerve strands from the L5 dorsal root were threaded through the microchannel. Tactile stimulation of the skin was reliably monitored with the three inner electrodes in the device, simultaneously recording signal amplitudes of up to 50 mu V under saline immersion. The overall SNR was approximately 4. A small but consistent time lag between the signals arriving at the three electrodes was observed and yields a fibre conduction velocity of 30 m s(-1). The fidelity of the recordings was verified by placing the same nerve strand in oil and recording activity with hook electrodes. Our results show that PDMS microchannel electrodes open a promising technological path to 3D regenerative interfaces.