A well-characterized line of rat Schwann cells has been examined for its ability to produce collagen. About 14% of the [(3)H]proline in the proteins that were secreted into the culture medium by the cells was hydroxylated, while only 1% of the labeled proteins in the cell layer contained [(3)H]hydroxyproline. Three sizes of procollagen polypeptides, of molecular weights about 105,000, 120,000, and 155,000, were present in the medium, as well as tropocollagen molecules that contained the usual alpha1 and alpha2 chains. Subsequently, the Schwann cells ceased producing the smaller collagenous polypeptides, although the total [(3)H]hydroxyproline content of the medium was unchanged. The [(3)H]hydroxyproline was almost entirely accounted for by the polypeptide of 155,000 daltons; this peptide was rapidly digested by collagenase or pepsin or chymotrypsin. The destruction by pepsin and chymotrypsin indicates that the large polypeptide, in contrast to procollagen and tropocollagen, is not in the collagenous (helical) conformation. Possibly, this substance is a very early form of procollagen that does not fold into the collagen conformation. The data show that cells of neuroectodermal origin can synthesize collagen, and also suggest that Schwann cells may be responsible for a large proportion of the collagen seen in peripheral neurinomas in vivo.