The identification of EGR2 mutations in patients with neuropathies and the phenotype Egr2/Krox20-/- have demonstrated that the Egr2 transcription factor is critical for peripheral nerve myelination. However, the mechanism by which these mutations cause disease remains unclear, as most patients present with disease in the heterozygous state, whereas Egr2+/- mice are phenotypically normal. To understand the effect of aberrant Egr2 activity on Schwann cell gene expression, we performed microarray expression profiling to identify genes regulated by Egr2 in Schwann cells. These include genes encoding myelin proteins and enzymes required for synthesis of normal myelin lipids. Using these newly identified targets, we have shown that neuropathy-associated EGR2 mutants dominant-negatively inhibit wild-type Egr2-mediated expression of essential myelin genes to levels sufficiently low to result in the abnormal myelination observed in these patients.