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This paper presents a portable, embedded, microcontroller-based system for bidirectional communication (recording and stimulation) between an electrode, implanted in the peripheral nervous system, and a host computer. The device is able to record and digitize spontaneous and/or evoked neural activities and store them in data files on a PC. In addition, the system has the capability of providing electrical stimulation of peripheral nerves, injecting biphasic current pulses with programmable duration, intensity, and frequency. The recording system provides a highly selective band-pass filter from 800 Hz to 3 kHz, with a gain of 56 dB. The amplification range can be further extended to 96 dB with a variable gain amplifier. The proposed acquisition/stimulation circuitry has been successfully tested through in vivo measurements, implanting a tf-LIFE electrode in the sciatic nerve of a rat. Once implanted, the device showed an input referred noise of 0.83 μVrms, was capable of recording signals below 10 μ V, and generated muscle responses to injected stimuli. The results demonstrate the capability of processing and transmitting neural signals with very low distortion and with a power consumption lower than 1 W. A graphic, user-friendly interface has been developed to facilitate the configuration of the entire system, providing the possibility to activate stimulation and monitor recordings in real time.