Schwann cell mitosis has been demonstrated in chronically denervated cat tibial nerves re-innervated by axons regenerating from the proximal stump of a coapted peroneal nerve. Thymidine incorporation rose above baseline levels at the axon front, with no detectable increase in more distal regions occupied by denervated Schwann cells. Schwann cells therefore enter S phase upon the arrival of a regenerating axon in vivo as previously described in tissue culture. Intraneural treatment of the denervated distal stump with Mitomycin C prior to re-innervation delayed the subsequent appearance of myelin formation. This supports the notion that axonally stimulated division of Schwann cells is a prerequisite for myelination during nerve regeneration. Axonal advancement was also retarded by drug treatment, possibly because of a reduced level of trophic support provided by the compromised Schwann cells. A comparable absence of myelin and poor re-innervation was found in chemically untreated distal stumps that had been maintained in the denervated state for prolonged periods when Schwann cell columns are known to undergo progressive atrophy. These observations suggest that nerve repair should be delayed for limited periods if efficacious regeneration is desired.