This communication summarizes the experimental evidence obtained in the giant nerve fibre of the tropical squid Sepioteuthis sepioidea, on the nature of the mechanism responsible for the long-lasting effects of axonal excitation on the membrane potential of the Schwann cell. In these nerve fibres the propagation of a train of nerve impulses by the axon is followed by a prolonged hyperpolarization of the Schwann cell which can be reproduced, or modified, by the external application of cholinergic compounds. The presence and exact localization of the different components of the acetylcholine system directly involved in such Schwann-cell responses was detected by means of pharmacological, histochemical and chemical procedures. Thus, the results of the experiments herein discussed revealed that, under physiological conditions: the Schwann cell is able to synthesize, store and release acetylcholine; and that it has acetylcholine receptors of the nicotinic type, and acetylcholinesterase enzyme activity in its plasma membrane. On the other hand, the axon has low acetyltransferase activity and acetylcholine concentration in its axoplasm, and a high acetylcholinesterase activity in its axolemma. It was also found that acetylcholine hyperpolarizes the Schwann cell by increasing its relative permeability to the potassium ion. The distribution pattern of the acetylcholine system indicates that it operates as a feedback mechanism for the regulation of the Schwann-cell membrane potential and ionic permeability following axonal excitation.