Efficient and rapid conduction of action potentials by saltatory conduction requires the clustering of voltage-gated sodium channels at nodes of Ranvier. This clustering results from interactions between neurons and myelinating glia, although it has not been established whether this glial signal is contact-dependent or soluble. To investigate the nature of this signal, we examined sodium channel clustering in co-cultures of embryonic rat dorsal root ganglion neurons and Schwann cells. Cultures maintained under conditions promoting or preventing myelination were immunostained with antibodies against the alpha subunit of the sodium channel and against ankyrin(G), a cytoskeletal protein associated with these channels. Consistent with previous in vivo studies (Vabnick et al., 1996), sodium channels and ankyrin G cluster at the onset of myelination. These clusters form adjacent to the ends of the myelinating Schwann cells and appear to fuse to form mature nodes. In contrast, sodium channels and ankyrin G do not cluster in neurons grown alone or in co-cultures where myelination is precluded by growing cells in defined media. Conditioned media from myelinating co-cultures also failed to induce sodium channel or ankyrin G clusters in cultures of neurons alone. Finally, no clusters develop in the amyelinated portions of suspended fascicles of dorsal root ganglia explants despite being in close proximity to myelinated segments in other areas of the dish. These results indicate that clustering of sodium channels requires contact with myelinating Schwann cells.