The myelin sheath is a unique component of the nervous system. Either a Schwann cell in the peripheral nervous system or an oligodendrocyte in the central nervous system is capable of forming myelin. There is extensive signaling and cross talk between the myelin-forming cell and the neuron to control the various stages of myelin formation, e.g., cell proliferation, migration, and differentiation. Of particular interest are the growth factors and hormones that regulate these stages. Steroid hormones, such as progesterone, have been shown to play a role in the regulation of myelin synthesis. The mRNAs for the enzymes that make progesterone are induced at the onset of myelin synthesis. Changes in gene expression caused by steroid hormones are being examined to identify additional signal transduction molecules that control myelin formation.