Schwann cell (SC) myelination is pivotal for the proper physiological functioning of the nervous system, but the underlying molecular mechanism remains less well understood. Here, we showed that the expression of bone morphogenetic protein 7 (BMP7) inversely correlates with myelin gene expression during peripheral myelination, which suggests that BMP7 is likely a negative regulator for myelin gene expression. Our experiments further showed that the application of BMP7 attenuates the cAMP induced myelin gene expression in SCs. Downstream pathway analysis suggested that both p38 MAPK and SMAD are activated by exogenous BMP7 in SCs. The pharmacological intervention and gene silence studies revealed that p38 MAPK, not SMAD, is responsible for BMP7-mediated suppression of myelin gene expression. In addition, c-Jun, a potential negative regulator for peripheral myelination, was up-regulated by BMP7. In vivo experiments showed that BMP7 treatment greatly impaired peripheral myelination in newborn rats. Together, our results established that BMP7 is a negative regulator for peripheral myelin gene expression and that p38 MAPK/c-Jun axis might be the main downstream target of BMP7 in this process.