Neuregulins and their specific receptors, members of the ErbB family of tyrosine kinases, have been implicated in the control of growth and development of Schwann cells, specialized cells that wrap around nerve axons to provide electrical insulation. Here we use gene targeting to generate mice that lack ErbB3, a high-affinity neuregulin receptor. Homozygous erbB3 mutant embryos lack Schwann-cell precursors and Schwann cells that accompany peripheral axons of sensory and motor neurons. The initial development of motor neurons and sensory neurons of dorsal root ganglia occurs as it should, but at later stages most motor neurons (79%) and sensory neurons in dorsal root ganglia (82%) undergo cell death in erbB3 mutant embryos. Degeneration of the peripheral nervous system in erbB3 mutant pups is thus much more severe than the cell death in mice that lack neurotrophins or neurotrophin receptors. We also show that ErbB3 functions in a cell-autonomous way during the development of Schwann cells, but not in the survival of sensory or motor neurons. Our results indicate that sensory and motor neurons require factors for their survival that are provided by developing Schwann cells.