The location and distribution of neural crest-derived Schwann cells during development of the peripheral nerves of chick forelimbs were examined using chick-quail chimeras. Neural crest cells were labeled by transplantation of the dorsal part of the neural tube from a quail donor to a chick host at levels of the neural tube destined to give rise to brachial innervation. The ventral roots, spinal nerves, and peripheral nerves innervating the chick forelimb were examined for the presence of quail-derived neural crest cells at several stages of embryonic development. These quail cells are likely to be Schwann cells or their precursors. Quail-derived Schwann cells were present in ventral roots and spinal nerves, and were distributed along previously described neural crest migratory pathways or along the peripheral nerve fibers at all stages of development examined. During early stages of wing innervation, quail-derived Schwann cells were not evenly distributed, but were concentrated in the ventral root and at the brachial plexus. The density of neural crest-derived Schwann cells decreased distal to the plexus, and no Schwann cells were ever seen in advance of the growing nerve front. When the characteristic peripheral nerve branching pattern was first formed, Schwann cells were clustered where muscle nerves diverged from common nerve trunks. In still older embryos, neural crest-derived Schwann cells were evenly distributed along the length of the peripheral nerves from the ventral root to the distal nerve terminations within the musculature of the forelimb. These observations indicate that Schwann cells accompany axons into the developing limb, but they do not appear to lead or direct axons to their targets. The transient clustering of neural crest-derived Schwann cells in the ventral root and at places where axon trajectories diverge from one another may reflect a response to some environmental feature within these regions. © 1992.