Neurofibromatosis type 1 (NF-1, von Recklinghausen's disease) is characterized by the focal accumulation of Schwann-like cells (SLC) to form subcutaneous and plexiform neurofibromas and schwannomas. The aim of the present study was to determine whether NF-SLC are competent to differentiate in the presence of axons. Five dermal neurofibromas from five patients with NF-type 1 were enzymatically dissociated and the resultant cells were co-cultured with fetal rat dorsal root ganglion neurons. The cultures were studied by indirect immunofluorescence microscopy using antibodies against galactocerebroside (galC), P0 glycoprotein, human nerve growth factor receptor (NGFR) and human myelin-associated glycoprotein (MAG). SLC were strongly NGFR+ but galC- and MAG-SLC for the 2 weeks of coculture. After 3 weeks in vitro, SLC-NGFR was down-regulated but some of the spindle shaped cells had become galC+. MAG-SLC first appeared after 5 weeks in vitro but P0 glycoprotein was never detected when studied up to 6 weeks. Our data demonstrate that axons induce SLC to down-regulate surface NGFR and to express some myelin components in a qualitatively normal fashion.