After injury, either as a result of trauma or degenerating/demyelinating diseases, axons of the central nervous system (CNS) normally fail to regenerate. Transplantation of glial cells, particularly Schwann cells, into areas of injury or demyelination has been considered a promising approach to promote recovery. However, the extent of Schwann cell interaction with CNS axons is greatly influenced by the presence of astrocytes which redefine the CNS-PNS (peripheral nervous system) boundary in a lesioned CNS, thereby preventing invasion of Schwann cells. The molecular basis for this restrictive effect of astrocytes on Schwann cells is not known. In the present study, we have cocultured astrocytes and Schwann cells to develop an in vitro model to characterize this interaction. Astrocytes in contact with Schwann cells appeared hypertrophied and showed increased staining for glial fibrillary acidic protein (GFAP). In cocultures maintained for 2-3 weeks, segregation of the two cell types was observed, Schwann cells appeared in groups, and each group was surrounded and separated from one another by astrocytic processes. Since the behavior of these two cell types observed in culture is very similar to their interaction seen in vivo, this coculture model may be useful in further studying the relationship between astrocytes and Schwann cells.