In the peripheral nervous system (PNS), tumor necrosis factor-alpha (TNF-α) derived from activated Schwann cells (SCs) play a critical role as a pleiotropic mediator. In this study, we examined the function of TNF-α as an inflammatory mediator in SCs activation. TNF-α exhibits its biological effect through two distinct surface receptors, TNF receptor 1 (TNFR1) and TNFR2. We show here that cultured SCs express both TNFR1 and TNFR2, and that activation of these receptors by TNF-α promotes expression of TNF-α. Meanwhile, TNF-α also increased the production of other inflammatory mediators. Furthermore, TNF-α is involved in the induction of apoptosis through binding to TNFR in SCs. The activation of SCs by lipopolysaccharide (LPS) is partially mediated by SCs-derived TNF-α. These findings suggest the existence of a positive feedback loop in the activation of SC via TNF-α. This loop may be involved in the prolonged activation of SCs. Acute or chronic stimulation of TNF-α by SC at sites of PNS inflammation may be critical in determining whether TNF-α has activational, inflammatory, or cytotoxic effects on these cells.