Claudin family proteins form the physical barriers of tight junctions (TJs) and regulate paracellular diffusion across polarized epithelia. In addition to these heterotypic TJs, claudin 11 forms autotypic TJs comprising the radial component of central nervous system myelin. The exact function of these TJs has been unclear, although their location at the membrane perimeter is well sited to regulate diffusion between the interstitium and intramyelinic space. In this study, we demonstrate that claudin 11 affords rapid nerve conduction principally for small diameter myelinated axons. Claudin 11–null mice have preserved myelin and axonal architecture, but as much as a 60% decrease in conduction. They also have increased action potential thresholds and activated internodal potassium channels. These data indicate that TJs modulate the biophysical properties of myelin. Computational modeling reveals that claudin 11 reduces current flow through myelin and moderates its capacitive charging. Together, our data shed new light on myelin structural components and our understanding of the biology and pathophysiology of this membrane.