Oxysterols are reactive molecules generated from the oxidation of cholesterol. Their implication in cholesterol homeostasis and in the progression of neurodegenerative disorders is well known, but few data are available for their functions in the peripheral nervous system. Our aim was to study the influence of oxysterols on myelin gene expression and myelin sheath formation in peripheral nerves. We show by gas chromatography/mass spectrometry that Schwann cells and sciatic nerves contain 24(S)-hydroxycholesterol, 25-hydroxycholesterol, and 27-hydroxycholesterol and that they express their biosynthetic enzymes and receptors (liver X receptors LXRα and LXRβ). We demonstrate that oxysterols inhibit peripheral myelin gene expression [myelin protein zero (MPZ) and peripheral myelin protein-22 (PMP22)] in a Schwann cell line. This downregulation is mediated by either LXRα or LXRβ, depending on the promoter context, as suggested by siRNA strategy and chromatin immunoprecipitation assays in Schwann cells and in the sciatic nerve of LXR knock-out mice. Importantly, the knock-out of LXR in mice results in thinner myelin sheaths surrounding the axons. Oxysterols repress myelin genes via two mechanisms: by binding of LXRs to myelin gene promoters and by inhibiting the Wnt/β-catenin pathway that is crucial for the expression of myelin genes. The Wnt signaling components (Disheveled, TCF/LEF, β-catenin) are strongly repressed by oxysterols. Furthermore, the recruitment of β-catenin at the levels of the MPZ and PMP22 promoters is decreased. Our data reveal new endogenous mechanisms for the negative regulation of myelin gene expression, highlight the importance of oxysterols and LXR in peripheral nerve myelination, and open new perspectives of treating demyelinating diseases with LXR agonists.