Studies of peripheral nerves in two different lines of hypomyelinating transgenic mice support the hypothesis that myelinating Schwann cells exert a significant influence on key biological properties of axons. The mice contain transgenes combining the peripheral myelin protein zero gene (P0) promoter and either the diphtheria toxin A chain gene product or the SV40 (simian virus 40) large T antigen. The consequences of peripheral nerve hypomyelination on axon diameter, neurofilament (NF) density, and NF phosphorylation were analyzed. The sciatic nerves of the P0 diphtheria toxin A transgenic mice (DT) evidenced the most severe hypomyelination, and this was associated with a dramatic decrease in NF phosphorylation plus a marked increase in NF density. In contrast, the sciatic nerves in the P0 SV40 large T antigen transgenic mice (SV40) were not as severely hypomyelinated and there was a milder decrease in NF phosphorylation plus a more modest increase in NF density. Further, the sciatic nerves in both lines evidenced a decrease in axonal caliber without any change in NF content. Taken together, these studies provide strong evidence indicating that myelinating Schwann cells exert a significant influence on axon caliber by modulating NF phosphorylation and NF packing density in the axons of peripheral nerves. Thus, key biological properties of axons are modulated by signals transmitted from myelinating Schwann cells to axons of peripheral nerves.