Adult rat sciatic nerve is known to express high levels of ciliary neurotrophic factor (CNTF) mRNA and protein. Here we examine the cellular localization of CNTF protein and mRNA in peripheral nerve and the regulation of CNTF expression by peripheral axons. In intact nerve, CNTF immunoreactivity is found predominantly in the cytoplasm of myelin-related Schwann cells. After axotomy, CNTF immunoreactivity and mRNA levels fall dramatically and do not recover unless axons regenerate. This behavior is similar to the pattern of myelin gene expression in these nerves. We conclude that the expression of CNTF in Schwann cells depends on axon-Schwann cell interactions.