We have generated previously transgenic rats that overexpress peripheral myelin protein 22 (PMP22) in Schwann cells. In the nerves of these animals, Schwann cells have segregated with axons to the normal 1:1 ratio but remain arrested at the promyelinating stage, apparently unable to elaborate myelin sheaths. We have examined gene expression of these dysmyelinating Schwann cells using semiquantitative reverse transcription-PCR and immunofluorescence analysis. Unexpectedly, Schwann cell differentiation appears to proceed normally at the molecular level when monitored by the expression of mRNAs encoding major structural proteins of myelin. Furthermore, an aberrant coexpression of early and late Schwann cell markers was observed. PMP22 itself acquires complex glycosylation, suggesting that trafficking of the myelin protein through the endoplasmic reticulum is not significantly impaired. We suggest that PMP22, when overexpressed, accumulates in a late Golgi-cell membrane compartment and uncouples myelin assembly from the underlying program of Schwann cell differentiation.