Neuregulin-1 provides an important axonally derived signal for the survival and growth of developing Schwann cells, which is transmitted by the ErbB2/ErbB3 receptor tyrosine kinases. Null mutations of the neuregulin-1, erbB2, or erbB3 mouse genes cause severe deficits in early Schwann cell development. Here, we employ Cre-loxP technology to introduce erbB2 mutations late in Schwann cell development, using a Krox20-cre allele. Cre-mediated erbB2 ablation occurs perinatally in peripheral nerves, but already at E11 within spinal roots. The mutant mice exhibit a widespread peripheral neuropathy characterized by abnormally thin myelin sheaths, containing fewer myelin wraps. In addition, in spinal roots the Schwann cell precursor pool is not correctly established. Thus, the Neuregulin signaling system functions during multiple stages of Schwann cell development and is essential for correct myelination. The thickness of the myelin sheath is determined by the axon diameter, and we suggest that trophic signals provided by the nerve determine the number of times a Schwann cell wraps an axon.