Signaling by laminins and axonal neuregulin has been implicated in regulating axon sorting by myelin-forming Schwann cells. However, the signal transduction mechanisms are unknown. Focal adhesion kinase (FAK) has been linked to alpha6beta1 integrin and ErbB receptor signaling, and we show that myelination by Schwann cells lacking FAK is severely impaired. Mutant Schwann cells could interdigitate between axon bundles, indicating that FAK signaling was not required for process extension. However, Schwann cell FAK was required to stimulate cell proliferation, suggesting that amyelination was caused by insufficient Schwann cells. ErbB2 receptor and AKT were robustly phosphorylated in mutant Schwann cells, indicating that neuregulin signaling from axons was unimpaired. These findings demonstrate the vital relationship between axon defasciculation and Schwann cell number and show the importance of FAK in regulating cell proliferation in the developing nervous system.