Vertebrate nervous system function requires glial cells, including myelinating glia that insulate axons and provide trophic support that allows for efficient signal propagation by neurons. In vertebrate peripheral nervous systems, neural crest‐derived glial cells known as Schwann cells (SCs) generate myelin by encompassing and iteratively wrapping membrane around single axon segments. SC gliogenesis and neurogenesis are intimately linked and governed by a complex molecular environment that shapes their developmental trajectory. Changes in this external milieu drive developing SCs through a series of distinct morphological and transcriptional stages from the neural crest to a variety of glial derivatives, including the myelinating sublineage. Cues originate from the extracellular matrix, adjacent axons, and the developing SC basal lamina to trigger intracellular signaling cascades and gene expression changes that specify stages and transitions in SC development. Here, we integrate the findings from in vitro neuron–glia co‐culture experiments with in vivo studies investigating SC development, particularly in zebrafish and mouse, to highlight critical factors that specify SC fate. Ultimately, we connect classic biochemical and mutant studies with modern genetic and visualization tools that have elucidated the dynamics of SC development. This article is categorized under: Signaling Pathways > Cell Fate Signaling Nervous System Development > Vertebrates: Regional Development