Peripheral nervous system abnormalities, including neuropathy, have been reported in people with cystic fibrosis. These abnormalities have largely been attributed to secondary manifestations of the disease. We tested the hypothesis that disruption of the cystic fibrosis transmembrane conductance regulator (CFTR) gene directly influences nervous system function by studying newborn CFTR^−/− pigs. We discovered CFTR expression and activity in Schwann cells, and loss of CFTR caused ultrastructural myelin sheath abnormalities similar to those in known neuropathies. Consistent with neuropathic changes, we found increased transcripts for myelin protein zero, a gene that, when mutated, can cause axonal and/or demyelinating neuropathy. In addition, axon density was reduced and conduction velocities of the trigeminal and sciatic nerves were decreased. Moreover, in vivo auditory brainstem evoked potentials revealed delayed conduction of the vestibulocochlear nerve. Our data suggest that loss of CFTR directly alters Schwann cell function and that some nervous system defects in people with cystic fibrosis are likely primary.