Company A has a 401(k) plan. A former employee who still maintains an account in Company A's plan is about to receive a distribution from Company B's (unrelated to Company A) plan. Is there any reason why Company A's plan cannot accept a rollover distribution from Company B's plan?

only reason is if company A's plan does not accept rollovers. also company A might want to see evidence that the money is coming from a qualified plan.

I reread this post multiple times, so I hope I have the facts correct. (I hate Mondays!!)
So, employee is terminated from both Company A and Company B?

Company A's plan could be written to only allow rollovers for eligible employees, or employees who are reasonably expected to become eligible employees. If this former employee no longer meets the definition of an eligible employee per the terms of Company A's plan, the plan does not have to accept the rollover from Company B.

Thanks for the replies. I should have clarified a little more, perhaps. Yes, the employee is terminated from both Company A and B. The plan currently says that a "Participant" (defined as an active participant who has not become ineligible to participate further in the plan) and an "Eligible Employee, prior to becoming a Participant" may make rollover contributions. So, as it currently reads, the plan does not allow this former employee to make a rollover. The question is, assuming the plan were amended to allow a terminated participant who still has an account balance to make a rollover, is there anything under the Code or otherwise that would prohibit it?

there is nothing in the code as long as the plan allows it.

Thank God for that. I once let a 401(k) plan accept the rollovers for the proceeds from the company's ESOP distributions (the cash value, not the shares) for terminated employees.