The cellular events leading to the generation of Schwann cells from the neural crest have recently been clarified and it is now possible to outline a relatively simple model of the Schwann cell lineage in the rat and mouse. Neural crest cells have to undergo 3 main developmental transitions to become mature Schwann cells. These are the formation of Schwann cell precursors from crest cells, the formation of immature Schwann cells from precursors and, lastly, the postnatal and reversible generation of non-myelin- and myelin-forming Schwann cells. Axonal signals involving neuregulins are important regulators of these events, in particular of the survival, proliferation and differentiation of Schwann cell precursors.