The interaction between neurons and glial cells that results in myelin formation represents one of the most remarkable intercellular events in development. This is especially evident at the primary functional site within this structure, the node of Ranvier. Recent experiments have revealed a surprising level of complexity within this zone, with several components, including ion channels, sequestered with a very high degree of precision and sharply demarcated borders. We discuss the current state of knowledge of the cellular and molecular mechanisms responsible for the formation and maintenance of the node. In normal axons, Na+ channels are present at high density within the nodal gap, and voltage-dependent K+ channels are sequestered on the internodal side of the paranode--a region known as the juxtaparanode. Modifying the expression of certain surface adhesion molecules that have been recently identified, markedly alters this pattern. There is a special emphasis on contactin, a protein with multiple roles in the nervous system. In central nervous system (CNS) myelinated fibers, contactin is localized within both the nodal gap and paranodes, and appears to have unique functions in each zone. New experiments on contactin-null mutant mice help to define these mechanisms.