Studies in Trembler and control mice demonstrated that myelinating Schwann cells exert a profound influence on axons. Extensive contacts between myelin and axons have been considered structural. However, demyelination decreases neurofilament phosphorylation, slow axonal transport, and axonal diameter, as well as significantly increasing neurofilament density. In control sciatic nerves with grafted Trembler nervesegments, these changes were spatially restricted: they were confined to axon segments without normal myelination. Adjacent regions of the same axons had normal diameters, neurofilament phosphotylation, cytoskeletal organization, and axonal transport rates. Close intercellular contacts between myelinating Schwann cellsand axons modulate a kinase-phosphatase system acting on neurofilaments and possibly other substrates. Myelination by Schwann cells sculpts the axon-altering functional architecture, electrical properties, and neuronal morphologies.