SCIP (suppressed cAMP-inducible POU) is a POU domain transcription factor expressed by Schwann cells. Drugs that elevate intracellular cAMP, such as forskolin, increase the expression of SCIP and partially mimic the inductive effects of axons on Schwann cell gene expression. Thus, SCIP may be involved in a differentiation pathway in Schwann cells that is activated by axons. We have examined this issue by studying SCIP expression in developing, degenerating, and regenerating rat peripheral nerves, and in Schwann cell-neuron cocultures. High levels of SCIP mRNA were detected in developing and regenerating nerves, and axotomy at these times caused the level of SCIP mRNA to plummet. Similarly, there were many SCIP-immunoreactive Schwann cell nuclei in developing and regenerating nerves, and their number fell sharply after axotomy. SCIP-immunoreactive Schwann cells were associated with axons in developing and regenerating nerves, and in Schwann cell-neuron cocultures. These data demonstrate that axons upregulate the expression of SCIP in Schwann cells, and that SCIP is expressed in Schwann cells that ensheathe axons. Thus, SCIP may mediate some of the changes in Schwann cell gene expression that accompany axonal ensheathment.