A neurone or nerve cell with its processes is the structural and functional unit of the nervous system. An axon of a neurone with its myelin sheath and neurilemma is called a nerve fibre. A bundle of many nerve fibres, enclosed by connective tissue coverings (endoneurium, perineurium and epineurium), along with blood vessels and fat cells, forms a nerve.

Thus neurone gives rise to nerve fibre and many nerve fibres together constitute a nerve, but their function is same—conduction of nerve impulse.