Schwann cell development and peripheral nerve myelination require the serial expression of transcriptional activators, such as Sox10, Oct6 (also called Scip or Pou3f1) and Krox20 (also called Egr2). Here we show that transcriptional repression, mediated by the zinc-finger protein Zeb2 (also known as Sip1), is essential for differentiation and myelination. Mice lacking Zeb2 in Schwann cells develop a severe peripheral neuropathy, caused by failure of axonal sorting and virtual absence of myelin membranes. Zeb2-deficient Schwann cells continuously express repressors of lineage progression. Moreover, genes for negative regulators of maturation such as Sox2 and Ednrb emerge as Zeb2 target genes, supporting its function as an 'inhibitor of inhibitors' in myelination control. When Zeb2 is deleted in adult mice, Schwann cells readily dedifferentiate following peripheral nerve injury and become repair cells. However, nerve regeneration and remyelination are both perturbed, demonstrating that Zeb2, although undetectable in adult Schwann cells, has a latent function throughout life.