Despite significant advances in robotics, commercially advanced prosthetics provide only a small fraction of the functionality of the amputated limb that they are meant to replace. Peripheral nerve interfacing could provide a rich controlling link between the body and these advanced prosthetics in order to increase their overall utility. Here, we report on the development of a fully integrated regenerative microchannel interface with 30 microelectrodes and signal extraction capabilities enabling evaluation in an awake and ambulatory rat animal model. In vitro functional testing validated the capability of the microelectrodes to record neural signals similar in size and nature to those that occur invivo. In vitro dorsal root ganglia cultures revealed striking cytocompatibility of the microchannel interface. Finally, invivo, the microchannel interface was successfully used to record a multitude of single-unit action potentials through 63% of the integrated microelectrodes at the early time point of 3weeks. This marks a significant advance in microchannel interfacing, demonstrating the capability of microchannels to be used for peripheral nerve interfacing.