Erectile dysfunction (ED) is a serious medical condition in which current treatments are ineffective in prostatectomy and diabetic patients, due to injury to the cavernous nerve (CN), which causes irreversible remodeling of the penis (decreased smooth muscle and increased collagen), through a largely undefined mechanism. We propose that sonic hedgehog (SHH) and neural innervation, are indispensable regulators of collagen in the penis, with decreased SHH protein being an integral component of the fibrotic response to loss of innervation. We examined collagen abundance and morphology in control (Peyronie’s), prostatectomy and diabetic patients, and in rat models of penile development, CN injury, SHH inhibition and under regenerative conditions, utilizing self-assembling peptide amphiphile (PA) nanofiber hydrogels for SHH delivery. Collagen abundance increased in penis of ED patients. In rats, collagen increased with CN injury in a defined time frame independent of injury severity. An inverse relationship between SHH and collagen abundance was identified; SHH inhibition increased and SHH treatment decreased penile collagen. SHH signaling in the pelvic ganglia (PG)/CN is important to maintain CN integrity and when inhibited, downstream collagen induction occurs. Collagen increased throughout penile development and with age, which is important when considering how to treat fibrosis clinically. These studies show that SHH PA treatment reduces collagen under regenerative post-prostatectomy conditions, indicating broad application for ED prevention in prostatectomy, diabetic and aging patients and in other peripheral nerve injuries. The PA nanofiber protein vehicle may be widely applicable as an in vivo delivery tool.