Transplantation of cell suspensions containing olfactory ensheathing cells (OECs) has been reported to remyelinate demyelinated axons in the spinal cord with a Schwann cell (SC)-like pattern of myelination. However, questions have been raised recently as to whether OECs can form SC-like myelin. To address this issue we prepared SCs and OECs from transgenic rats in which a marker gene, human placental alkaline phosphatase (hPAP), is linked to the ubiquitously active promoter of the R26 gene. SCs were prepared from the sciatic nerve and OECs from the outer nerve-fiber layer of the olfactory bulb. Positive S100 and p75 immunostaining indicated that >95% of cells in culture displayed either SC or OEC phenotypes. Suspensions of either SCs or OECs were transplanted into an X-irradiation/ethidium bromide demyelinating lesion in the spinal cord. We observed extensive SC-like remyelination following either SC or OEC transplantation 3 weeks after injection of the cells. Alkaline phosphatase (ALP) chromagen reaction product was associated clearly with the myelin-forming cells. Thus, cell suspensions that are enriched in either SCs or OECs result in peripheral-like myelin when transplanted in vivo.