Signaling through cyclic AMP (cAMP) has been implicated in the regulation of Schwann cell (SC) proliferation and differentiation. In quiescent SCs, elevation of cAMP promotes the expression of proteins associated with myelination such as Krox-20 and P0, and downregulation of markers associated with the non-myelinating SC phenotype. We have previously shown that the motor protein myosin II is required for the establishment of normal SC-axon interactions, differentiation and myelination, however, the mechanisms behind these effects are unknown. Here we report that the levels and activity of myosin light chain kinase (MLCK), an enzyme that regulates MLC phosphorylation in non-muscle cells, are dramatically downregulated in SCs after cAMP treatment, in a similar pattern to that of c-Jun, a known inhibitor of myelination. Knockdown of MLCK in SCs mimics the effect of cAMP elevation, inducing plasma membrane expansion and expression of Krox-20 and myelin proteins. Despite activation of myelin gene transcription these cells fail to make compact myelin when placed in contact with axons. Our data indicate that myosin II activity is differentially regulated at various stages during myelination and that in the absence of MLCK the processes of SC differentiation and compact myelin assembly are uncoupled.