The thickness of the myelin sheath that insulates axons is fitted for optimal nerve conduction velocity. Here, we show that, in Schwann cells, mammalian disks large homolog 1 (Dlg1) interacts with PTEN (phosphatase and tensin homolog deleted on chromosome 10) to inhibit axonal stimulation of myelination. This mechanism limits myelin sheath thickness and prevents overmyelination in mouse sciatic nerves. Removing this brake results also in myelin outfoldings and demyelination, characteristics of some peripheral neuropathies. Indeed, the Dlg1 brake is no longer functional in a mouse model of Charcot-Marie-Tooth disease. Therefore, negative regulation of myelination appears to be essential for optimization of nerve conduction velocity and myelin maintenance.