It is becoming ever clearer that Schwann cells and Schwann-cell precursors are an important source of developmental signals in embryonic and neonatal nerves. This article reviews experiments showing that these signals regulate the survival and differentiation of other cells in early nerves. The evidence indicates that glial-derived signals are necessary for neuronal survival at crucial periods of development, that they regulate the molecular and functional specialization of axons and that they control the maturation of the perineurial sheath that protects nerves from inflammation and unwanted macro-molecules produced in the surrounding tissues. Furthermore, an autocrine survival circuit enables Schwann cells in postnatal nerves to survive in the absence of axons, a vital requirement for successful nerve regeneration following injury. The molecular identity of these signals and their receptors is currently being determined.