The Schwann cell myelin sheath is a multilamellar structure with distinct structural domains in which different proteins are localized. Intracellular dye injection and video microscopy were used to show that functional gap junctions are present within the myelin sheath that allow small molecules to diffuse between the adaxonal and perinuclear Schwann cell cytoplasm. Gap junctions are localized to periodic interruptions in the compact myelin called Schmidt-Lanterman incisures and to paranodes; these regions contain at least one gap junction protein, connexin32 (Cx32). The radial diffusion of low molecular weight dyes across the myelin sheath was not interrupted in myelinating Schwann cells from cx32-null mice, indicating that other connexins participate in forming gap junctions in these cells. Owing to the unique geometry of myelinating Schwann cells, a gap junction-mediated radial pathway may be essential for rapid diffusion between the adaxonal and perinuclear cytoplasm, since this radial pathway is approximately one million times faster than the circumferential pathway.