During embryonic development and in response to injury, the growing axons of peripheral neurons may influence the migration and proliferation of Schwann cells which, in return, may present neurons with a critical supply of factors required for neuronal survival, growth and differentiation. The identification and characterization of agents influencing the proliferation of Schwann cells as well as Schwann cell production of factors affecting neurons is greatly facilitated by the use of in vitro techniques. We describe here a simplified method of obtaining large numbers of purified neonatal rat sciatic nerve Schwann cells for use in generating large numbers of replicate microcultures. We then illustrate the use of these microcultures to examine Schwann cell: i) morphology and survival; ii) proliferation; and iii) production of neuronotrophic and neurite-promoting activities. We report that rat Schwann cells in microculture proliferate in response to serum, laminin and fibronectin, cholera toxin, and chick embryo parasympathetic ciliary neurons. Also, extracts of Schwann cell microcultures contain independently regulated activities which support the survival and neurite outgrowth of peripheral ganglionic neurons.