Neurological sequelae of mild traumatic brain injury are associated with the damage to white matter myelinated axons. In vitro models of axonal injury suggest that the progression to pathological ruin is initiated by the mechanical damage to tetrodotoxin-sensitive voltage-gated sodium channels that breaches the ion balance through alteration in kinetic properties of these channels. In myelinated axons, sodium channels are concentrated at nodes of Ranvier, making these sites vulnerable to mechanical injury. Nodal damage can also be inflicted by injury-induced partial demyelination of paranode/juxtaparanode compartments that flank the nodes and contain high density of voltage-gated potassium channels. Demyelination-induced potassium deregulation can further aggravate axonal damage; however, the role of paranode/juxtaparanode demyelination in immediate impairment of axonal function, and its contribution to the development of axonal depolarization remain elusive. A biophysically realistic computational model of myelinated axon that incorporates ion exchange mechanisms and nodal/paranodal/juxtaparanodal organization was developed and used to study the impact of injury-induced demyelination on axonal signal transmission. Injured axons showed alterations in signal propagation that were consistent with the experimental findings and with the notion of reduced axonal excitability immediately post trauma. Injury-induced demyelination strongly modulated the rate of axonal depolarization, suggesting that trauma-induced damage to paranode myelin can affect axonal transition to degradation. Results of these studies clarify the contribution of paranode demyelination to immediate post trauma alterations in axonal function and suggest that partial paranode demyelination should be considered as another "injury parameter" that is likely to determine the stability of axonal function.