Programmed cell death during development resulting from the lack of appropriate survival factors has been demonstrated in both neurons and oligodendrocytes and occurs mostly in the form of apoptosis. We now demonstrate that Schwann cells in the rat sciatic nerve undergo apoptosis during early postnatal development and that the amount of apoptosis is markedly increased by axotomy. The apoptotic Schwann cells express the low-affinity nerve growth factor receptor but not myelin-related proteins, indicating that they are in the premyelinating state. Apoptosis resulting from normal development or from axotomy can be inhibited markedly by exogenous neuregulin. Consistent with this, the neuregulin receptor components erbB2 and erbB3 are expressed and phosphorylated in developing sciatic nerve. These data suggest that Schwann cell number in developing peripheral nerve is regulated by apoptosis through competition for axonally derived neuregulin.