After an injury in the adult mammalian central nervous system, lesioned axons fail to regenerate. This failure to regenerate contrasts with the remarkable potential of axons to grow during embryonic development and after an injury in the peripheral nervous system. Peripheral sensory neurons with cell soma in dorsal root ganglia (DRG) switch to a regenerative state after nerve injury to enable axon regeneration and functional recovery. Decades of research have focused on the signaling pathways elicited by injury in sensory neurons and in Schwann cells that insulate axons as central mechanisms regulating nerve repair. However, neuronal microenvironment is far more complex and is composed of multiple cell types including endothelial, immune and glial cells. Whether the microenvironment surrounding neuronal soma contribute to the poor regenerative outcomes following central injuries remains largely unexplored. To answer this question, we performed a single cell transcriptional profiling of the DRG neuronal microenvironment response to peripheral and central injuries. In dissecting the roles of the microenvironment contribution, we have focused on a poorly studied population of Satellite Glial Cells (SGC) surrounding the neuronal cell soma. This study has uncovered a previously unknown role for SGC in nerve regeneration and defined SGC as transcriptionally distinct from Schwann cells while sharing similarities with astrocytes. Upon a peripheral injury, SGC contribute to axon regeneration via Fatty acid synthase (Fasn)-PPARα signaling pathway. Through repurposing fenofibrate, an FDA- approved PPARα agonist used for dyslipidemia treatment, we were able to rescue the impaired regeneration in mice lacking Fasn in SGC. Our analysis reveals that in response to central injuries, SGC do not activate the PPAR signaling pathway. However, induction of this pathway with fenofibrate treatment, rescued axon regeneration following an injury to the central nerves. Collectively, our results uncovered a previously unappreciated role of the neuronal microenvironment differential response in central and peripheral injuries.