We have examined the regulation of growth-associated protein 43 kD (GAP-43) in rat Schwann cells. In unlesioned adult nerves, GAP-43-immunoreactivity was restricted to non-myelinating Schwann cells and unmyelinated axons. When adult nerves were transected to cause permanent axotomy, previously myelinating Schwann cells expressed progressively more GAP-43-immunoreactivity over 3 weeks, and GAP-43 mRNA levels increased over a similar time course. The peak level of GAP-43 mRNA occurred at least 2 weeks later than that of nerve growth factor receptor, another marker of denervated Schwann cells. In contrast, after nerve-crush, which allows axonal regeneration, many fewer Schwann cells had GAP-43-immunoreactivity, and the amount of GAP-43 mRNA was markedly lower than in transected nerves. Forskolin, a drug that activates adenylate cyclase and mimics many effects of axon-Schwann cell interactions, markedly reduced GAP-43-immunoreactivity and mRNA expression in cultured Schwann cells, whereas interleukin-1 had no effect. These data demonstrate that axon-Schwann cell interactions inhibit the expression of GAP-43 in Schwann cells and that this effect is mimicked by forskolin.