Schwann cells are the myelinating glia of the peripheral nervous system. Neuron–Schwann cell contact profoundly affects several aspects of Schwann cell phenotype, including stimulation of mitosis and myelin formation. Many reports suggest that neuronal contact exerts this influence on Schwann cells by elevating Schwann cell cAMP and activating cAMP-dependent protein kinase A (PKA). To elucidate the importance of Schwann cell PKA in neuronal stimulation of Schwann cell mitosis and myelination, the gene encoding the PKA inhibitory protein RIαAB or PKIEGFP was delivered to Schwann cells using retroviral vectors. PKA inhibitory retroviral vectors effectively blocked forskolin-stimulated Schwann cell mitosis and morphological change, demonstrating the ability of the vectors to inhibit PKA in infected Schwann cells. Treatment of dorsal root ganglia neuron–Schwann cell cocultures with H-89 (10 μm) or KT5720 (1–10 μm), chemical inhibitors selective for PKA, significantly inhibited neuronal stimulation of Schwann cell mitosis. In contrast, retrovirus-mediated inhibition of Schwann cell PKA had no effect on the ability of neurons to stimulate Schwann cell mitosis. However, markedly fewer myelin segments were formed by Schwann cells expressing PKA inhibitory proteins compared with controls. These results suggest that activation of Schwann cell PKA is required for myelin formation but not for Schwann cell mitosis stimulated by interaction with neurons.