Mutations in the gene for peripheral myelin protein 22 (PMP22) are associated with peripheral neuropathy in mice and humans. Although PMP22 is strongly expressed in peripheral nerves and is localised largely to the myelin sheath, a dual role has been suggested as 2 differentially expressed promoters have been found. In this study we compared the initial stages of postnatal development in transgenic mouse models which have, in addition to the murine pmp22 gene, 7 (C22) and 4 (C61) copies of the human PMP22 gene and in homozygous and heterozygous Trembler-J (TrJ) mice, which have a point mutation in the pmp22 gene. The number of axons that were singly ensheathed by Schwann cells was the same in all groups indicating that PMP22 does not function in the initial ensheathment and separation of axons. At both P4 and P12 all mutants had an increased proportion of fibres that were incompletely surrounded by Schwann cell cytoplasm indicating that this step is disrupted in PMP22 mutants. C22 and homozygous TrJ animals could be distinguished by differences in the Schwann cell morphology at the initiation of myelination. In homozygous TrJ animals the Schwann cell cytoplasm had failed to make a full turn around the axon whereas in the C22 strain most fibres had formed a mesaxon. It is concluded that PMP22 functions in the initiation of myelination and probably involves the ensheathment of the axon by the Schwann cell, and the extension of this cell along the axon. Abnormalities may result from a failure of differentiation but more probably from defective interactions between the axon and the Schwann cell.