Dicer is responsible for the generation of mature micro-RNAs (miRNAs) and loading them into RNA-induced silencing complex (RISC). RISC functions as a probe that targets mRNAs leading to translational suppression and mRNA degradation. Schwann cells (SCs) in the peripheral nervous system undergo remarkable differentiation both in morphology and gene expression patterns throughout lineage progression to myelinating and nonmyelinating phenotypes. Gene expression in SCs is particularly tightly regulated and critical for the organism, as highlighted by the fact that a 50% decrease or an increase to 150% of normal gene expression of some myelin proteins, like PMP22, results in peripheral neuropathies. Here, we selectively deleted Dicer and consequently gene expression regulation by mature miRNAs from Mus musculus SCs. Our results show that in the absence of Dicer, most SCs arrest at the promyelinating stage and fail to start forming myelin. At the molecular level, the promyelinating transcription factor Krox20 and several myelin proteins [including myelin associated glycoprotein (MAG) and PMP22] were strongly reduced in mutant sciatic nerves. In contrast, the myelination inhibitors SOX2, Notch1, and Hes1 were increased, providing an additional potential basis for impaired myelination. A minor fraction of SCs, with some peculiar differences between sensory and motor fibers, overcame the myelination block and formed unusually thin myelin, in line with observed impaired neuregulin and AKT signaling. Surprisingly, we also found signs of axonal degeneration in Dicer mutant mice. Thus, our data indicate that miRNAs critically regulate Schwann cell gene expression that is required for myelination and to maintain axons via axon-glia interactions.