Interruption of axonal continuity in peripheral nerve trunks leads to axonal and myelin breakdown and removal distal to the injury site, a process known as Wallerian degeneration. Clearance of axonal and myelin debris has been attributed to the cooperative actions of two cell types, the indigenous Schwann cells and macrophages recruited to the regions of tissue damage. Recent work in this area has suggested a limited role for Schwann cells in myelin degradation and has emphasized the role of macrophages, not only in myelin clearance but also in the stimulation of Schwann cell proliferation which also occurs during Wallerian degeneration. In this report, we demonstrate that rat Schwann cells are capable of substantial myelin degradation unaided by macrophages. Observations were made following excision of neuronal somata from well-myelinated rat dorsal root ganglion neuron/Schwann cell co-cultures. The various stages of myelin breakdown were observed by phase microscopy, Sudan black staining, or electron microscopy. The time course for breakdown of individual myelin internodes varied from 2 to 10 days after injury and was to some extent dependent upon the original internodal length. Additionally, we show that most Schwann cells involved in Wallerian degeneration in the absence of macrophages undergo cell division following degradation of myelin into granules visible by light microscopy. The co-cultures employed were essentially free of macrophages as assessed by immunostaining for the OX42, ED2, and ED1 macrophage markers. No macrophages were detected by light or electron microscopy in the vicinity of the identified Schwann cells and furthermore, macrophages/monocytes were rarely observed in uninjured co-cultures as assessed by fluorochrome-conjugated acetylated LDL labelling. These results provide evidence in support of the ability of Schwann cells to carry out degradation of short myelin segments and to proliferate without macrophage assistance during Wallerian degeneration in vitro.