Alterations in peripheral myelin protein 22 (PMP22) expression are associated with a heterogeneous group of hereditary demyelinating peripheral neuropathies. Two mutations at glycine 94, a single guanine insertion or deletion in PMP22, result in different reading frameshifts and, consequently, an extended G94fsX222 or a truncated G94fsX110 protein, respectively. Both of these autosomal dominant mutations alter the second half of PMP22 and yet are linked to clinical phenotypes with distinct severities. The G94fsX222 is associated with hereditary neuropathy with liability to pressure palsies, whereas G94fsX110 causes severe neuropathy diagnosed as Dejerine-Sottas disease or Charcot-Marie-Tooth disease type IA. To investigate the subcellular changes associated with the G94 frameshift mutations, we expressed epitope-tagged forms in primary rat Schwann cells. Biochemical and immunolabeling studies indicate that, unlike the wild-type protein, which is targeted for the plasma membrane, frameshift PMP22s are retained in the cell, prior to reaching the medial Golgi compartment. Similar to Wt-PMP22, both frameshift mutants are targeted for proteasomal degradation and accumulate in detergent-insoluble, ubiquitin-containing aggregates upon inhibition of this pathway. The extended frameshift PMP22 shows the ability to form spontaneous aggregates in the absence of proteasome inhibition. On the other hand, Schwann cells expressing the truncated protein proliferate at a significantly higher rate than Schwann cells expressing the wild-type or the extended PMP22. In summary, these results suggest that a greater potential for PMP22 aggregation is associated with a less severe phenotype, whereas dysregulation of Schwann cell proliferation is linked to severe neuropathy.