Glial cell line-derived neurotrophic factor (GDNF), a known survival factor for neurons, has recently been shown to stimulate the migration of Schwann cells (SCs) and to enhance myelination. GDNF exerts its biological effects by activating the Ret tyrosine kinase in the presence of glycosylphosphatidylinositol-linked receptor, GDNF family receptor (GFR) α1. In Ret-negative cells, the alternative transmembrane coreceptor is the 140-kDa isoform of neural cell adhesion molecule (NCAM) associated with a non-receptor tyrosine kinase Fyn. We confirmed that GDNF, GFRα1 and NCAM are expressed in neonatal rat SCs. We found that GDNF induces an increase in the partitioning of NCAM and heparan sulfate proteoglycan agrin into lipid rafts and that heparinase inhibits GDNF-signaling in SCs. In addition to activation of extracellular signal-regulated kinases, and phosphorylation of cAMP response element binding protein, we found that cAMP-dependent protein kinase A and protein kinase C are involved in GDNF-mediated signaling in SCs. Although GDNF did not promote the differentiation of purified SCs into the myelinating phenotype, it enhanced myelination in neuron–SC cocultures. We conclude that GDNF utilizes NCAM signaling pathways to regulate SC function prior to myelination and at early stages of myelin formation.