Significance Aryl hydrocarbon receptor (AHR) is well known to mediate xenobiotic metabolism in vertebrates. Growing evidence reveals that AHR seems to have endogenous roles in the development and functioning of different organs. In our current study, we describe a role of AHR in peripheral myelination and in nerve sheath tumors. We show that the AHR pathway is dysregulated in human biopsies of nerve tumors. The blockade of AHR provokes cell death in nerve tumors, suggesting a therapeutic avenue in the treatment of this invasive cancer. Furthermore, the inhibition of Ahr in mice provokes locomotor defects and alteration of myelin structure. This work unravels an endogenous role of Ahr in peripheral myelination and a potential treatment of nerve tumours.