Axonal maturation and myelination are essential processes for establishing an efficient neuronal signaling network. We found that nardilysin (N-arginine dibasic convertase, also known as Nrd1 and NRDc), a metalloendopeptidase enhancer of protein ectodomain shedding, is a critical regulator of these processes. Nrd1−/− mice had smaller brains and a thin cerebral cortex, in which there were less myelinated fibers with thinner myelin sheaths and smaller axon diameters. We also found hypomyelination in the peripheral nervous system (PNS) of Nrd1−/− mice. Neuron-specific overexpression of NRDc induced hypermyelination, indicating that the level of neuronal NRDc regulates myelin thickness. Consistent with these findings, Nrd1−/− mice had impaired motor activities and cognitive deficits. Furthermore, NRDc enhanced ectodomain shedding of neuregulin1 (NRG1), which is a master regulator of myelination in the PNS. On the basis of these data, we propose that NRDc regulates axonal maturation and myelination in the CNS and PNS, in part, through the modulation of NRG1 shedding.