The signalling system comprising the ligand Neuregulin-1, and its receptors, ErbB2 and ErbB3, plays multiple and important roles in glial development. These include functions in early development of neural crest cells, in expansion of the Schwann cell precursor pool and in myelination. Neuregulin is one of the crucial axon-derived signals that influence development of Schwann cells. These are specialized cells that ensheath peripheral axons and provide electrical insulation. Schwann cells have also long been implicated in providing more than a simple ensheathing function. Compelling evidence for this has emerged from the analysis of mice lacking these cells, resulting from a non-functional or compromised Neuregulin signalling system. They serve as a model to study glia-nerve interactions in vivo and indicate that Schwann cells provide important neurotrophic signals, and also cues that regulate perineurium development and nerve fasciculation.