To isolate new zinc finger genes expressed at early stages of peripheral nerve development, we have used PCR to amplify conserved zinc finger sequences. RNA from rat embryonic day 12 and 13 sciatic nerves, a stage when nerves contain Schwann cell precursors, was used to identify several genes not previously described in Schwann cells. One of them, zinc finger protein (ZFP)-57, proved to be the homologue of a mouse gene found in F9 teratocarcinoma cells. Its mRNA expression profile within embryonic and adult normal and transected peripheral nerves, and its distribution in the rest of the nervous system is described. High levels of expression are seen in embryonic nerves and spinal cord. These drop rapidly during the first few weeks after birth, a pattern mirrored in other parts of the nervous system. ZFP-57 localizes to the nucleus of Schwann and other cells. The sequence contains an N-terminal Krü ppel-associated box (KRAB) domain and ZFP-57 constructs containing green fluorescent protein reveal that the protein colocalizes with heterochromatin protein 1␣ to centromeric heterochromatin in a characteristic speckled pattern in NIH3T3 cells. The KRAB domain is required for this localization, because constructs lacking it target the protein to the nucleus but not to the centromeric heterochromatin. When fused to a heterologous DNA binding domain, the KRAB domain of ZFP-57 represses transcription, and fulllength ZFP-57 represses Schwann cell transcription from myelin basic protein and P 0 promoters in co-transfection assays. Zfp-57 mRNA is up-regulated in Schwann cells in response to leukemia inhibitory factor and fibroblast growth factor 2.The major stages in the embryonic development of Schwann cells in rodent peripheral nerves have been defined at the cellular level. Nearly all cells isolated from nerves of embryo day (E) 1 14/E15 rats or E12/E13 mice are Schwann cell precursors (1-4). They are derived from the neural crest and give rise to the immature Schwann cells of late embryonic and early postnatal nerves. These cells are the source of the myelinating or non-myelinating cells of adult nerves. Schwann cell precursors can be distinguished from immature Schwann cells on the one hand and from neural crest cells on the other by a number of criteria, including differences in the regulation of survival and DNA synthesis and antigenic phenotype (5-8).A number of transcription factors are involved in the cellular transitions that take place in embryonic nerves and early postnatal nerves (9, 10). The HMG domain factor Sox-10 is expressed in most or all neural crest cells and is required for the formation of the glial lineage (11,12). It is also likely to be important in later stages of development, because it has the capacity to synergize with Krox-20 (Egr-2) (see below) to activate the connexin 32 promoter (13-15). Two transcription factors, the POU domain proteins Oct-6 (SCIP, Tst-1, Pou3f1) and Brn-2 are involved in the timing of myelination (16 -18), whereas Schwann cells in nerves of mice that are null for the zi...