A simple and reproducible demyelination-remyelination system was developed with cocultures of rat dorsal root ganglia (DRG) neurons and Schwann cells, and the effects of steroid hormones were examined in this system. Addition of forskolin to the cocultures induced demyelination and lower levels of myelin protein P0 expression were seen in immunoblots after eight days of treatment. Removal of forskolin caused remyelination and the amount of P0 expression was partially recovered. States of demyelination and remyelination were further confirmed by morphological examination of myelin internodes, such as incorporation of fluorescently-labeled fatty acid and immunostaining of P0 and myelin associated glycoprotein. Ultrastructural analyses of the cocultures showed the presence of myeloid bodies and peeling of myelin lamellae during the demyelination process. Using this demyelination-remyelination system, regulatory roles of steroid hormones during demyelination and remyelination were studied. Immunoblots of P0 and incorporation of fluorescently-labeled fatty acid demonstrated that treatments of the cocultures with dexamethasone and estradiol not only reduced the extent of demyelination but also enhanced remyelination. These results suggest that steroid hormones have roles as neuroprotective agents against demyelination and augmentative agents for remyelination.