Peripheral myelin protein PMP22 has been suggested to have a role in peripheral nerve myelination and cell proliferation. Defects at the PMP22 locus are associated with peripheral neuropathies such as Charcot-Marie-Tooth disease type 1A. We now demonstrate that mice devoid of Pmp22 are retarded in the onset of myelination and develop abundant sausage-like hypermyelination structures (tomacula) at a young age followed by severe demyelination, axonal loss and functional impairment. Mice carrying one functional copy of Pmp22 are less affected but they also exhibit focal tomacula comparable to the morphological features in hereditary neuropathy with liability to pressure palsies (HNPP). We conclude that Pmp22 is required for the correct development of peripheral nerves, the maintenance of axons and the determination of myelin thickness and stability.