We have developed a potential model of Schwann cell tumor formation in neurofibromatosis type 1 (NF1). We show that mouse Schwann cells heterozygous or null at Nf1 display angiogenic and invasive properties, mimicking the behavior of Schwann cells from human neurofibromas. Mutations at Nf1 are insufficient to promote Schwann cell hyperplasia. Here we show that Schwann cell hyperplasia can be induced by protein kinase A activation in mutant cells. Removal of serum from the culture medium also stimulates hyperplasia, but only in some mutant cells. After serum removal, clones of hyperproliferating Schwann cells lose contact with axons in vitro, develop growth factor-independent proliferation, and exhibit decreased expression of the cell differentiation marker P0 protein; hyperproliferating cells develop after a 1-week lag in Schwann cells heterozygous at Nf1. The experiments suggest that events subsequent to Nf1 mutations are required for development of Schwann cell hyperplasia. Finally, an anti-Ras farnesyl protein transferase inhibitor greatly diminished both clone formation and hyperproliferation of null mutant cells, but not invasion; farnesyl transferase inhibitors could be useful in treating benign manifestations of NF1.