Background Peripheral nerve reconstruction frequently requires interposition grafting when tension-free primary repair is not possible. Autologous nerve grafting remains the reference standard but is limited by donor-site morbidity, finite graft length, and increased operative time. Processed nerve allografts provide an acellular scaffold alternative and are increasingly utilised in selected clinical scenarios. Purpose To review the evidence and practical considerations for nerve allograft use in peripheral nerve reconstruction, with emphasis on indications, outcomes, and limitations relative to autograft and synthetic conduits. Methodology A focused review of contemporary anatomical, biological, and clinical literature was performed. Studies evaluating processed nerve allografts were analysed with respect to mechanism of regeneration, gap length, nerve type, functional outcomes, and comparative performance against autologous grafts and conduits. Results Processed nerve allografts consist of decellularised human donor nerves that preserve native extracellular matrix architecture, facilitating axonal guidance without immunogenicity. Clinical evidence supports their use in short nerve gaps, particularly in sensory and digital nerve injuries, where outcomes approach those of autograft while avoiding donor morbidity. Reliability declines with increasing gap length and in mixed or motor nerves, with reduced rates of meaningful functional recovery compared with autologous grafting. Outcomes are influenced by gap length, nerve calibre, local tissue environment, and cost considerations. Conclusion Nerve allografts represent a useful adjunct in peripheral nerve reconstruction when applied selectively. They are best suited to short sensory nerve gaps in favourable wound beds. Autologous nerve grafting remains the preferred option for long gaps and high-demand motor reconstruction.