During evolution, as organisms increased in complexity and function, the need for the ensheathment and insulation of axons by glia became vital for faster conductance of action potentials in nerves. Myelination, as the process is termed, facilitates the formation of discrete domains within the axolemma that are enriched in ion channels, and macromolecular complexes consisting of cell adhesion molecules and cytoskeletal regulators. While it is known that glia play a substantial role in the coordination and organization of these domains, the mechanisms involved and signals transduced between the axon and glia, as well as the proteins regulating axo-glial junction formation remain elusive. Emerging evidence has shed light on the processes regulating myelination and domain differentiation, and key molecules have been identified that are required for their assembly and maintenance. This review highlights these recent findings, and relates their significance to domain disorganization as seen in several demyelinating disorders and other neuropathies.