The rapid morphologic changes in Schwann cells and in their relationships to axons during the transition from the premyelinating to the myelinating state have been known for more than 15 years. The sorting of axons by dividing Schwann cells, the establishment of a 1:1 relationship between a postmitotic Schwann cell, and the onset of myelin sheath formation have all been described in detail. However, the chain of molecular events and mechanisms by which these morphologic changes are regulated has not been elucidated. In this chapter we have reviewed results that strongly suggest that the adhesion molecule L1 is one of the important determinants that mediate the elongation of the Schwann cell along the axon, and the extension of Schwann processes to engulf axons. Thus, L1 functions to promote the spreading of the Schwann cell process over the surface of the axon. L1 does not appear to be exclusively involved in the adhesion of Schwann cells to axons, in the activation of Schwann cell proliferation by axons, or in the induction of synthesis of extracellular matrix proteins. The results from the anti-L1 blocking experiments further provided clues for an understanding of how the expression of GalC and MAG, which are both likely to be involved in the initiation of myelination, are regulated. These results imply that the overall regulation of expression of these early myelin components could require controls other than a single signaling mechanism derived from contact with axons. We propose that the deposition of basal lamina or one of its components could also be involved. Finally, the results from anti-GalC-blocking experiments indicated that GalC is involved in the mechanism of early growth of the myelin spiral.