Endosomal sorting plays a fundamental role in directing neural development. By altering the temporal and spatial distribution of membrane receptors, endosomes regulate signaling pathways that control the differentiation and function of neural cells. Several genes linked to inherited demyelinating peripheral neuropathies, known as Charcot-Marie-Tooth (CMT) disease, encode proteins that directly interact with components of the endosomal sorting complex required for transport (ESCRT). Our previous studies demonstrated that a point mutation in the ESCRT component hepatocyte growth-factor-regulated tyrosine kinase substrate (HGS), an endosomal scaffolding protein that identifies internalized cargo to be sorted by the endosome, causes a peripheral neuropathy in the neurodevelopmentally impaired teetering mice. Here, we constructed a Schwann cell-specific deletion of Hgs to determine the role of endosomal sorting during myelination. Inactivation of HGS in Schwann cells resulted in motor and sensory deficits, slowed nerve conduction velocities, delayed myelination and hypomyelinated axons, all of which occur in demyelinating forms of CMT. Consistent with a delay in Schwann cell maturation, HGS-deficient sciatic nerves displayed increased mRNA levels for several promyelinating genes and decreased mRNA levels for genes that serve as markers of myelinating Schwann cells. Loss of HGS also altered the abundance and activation of the ERBB2/3 receptors, which are essential for Schwann cell development. We therefore hypothesize that HGS plays a critical role in endosomal sorting of the ERBB2/3 receptors during Schwann cell maturation, which further implicates endosomal dysfunction in inherited peripheral neuropathies.SIGNIFICANCE STATEMENT Schwann cells myelinate peripheral axons, and defects in Schwann cell function cause inherited demyelinating peripheral neuropathies known as CMT. Although many CMT-linked mutations are in genes that encode putative endosomal proteins, little is known about the requirements of endosomal sorting during myelination. In this study, we demonstrate that loss of HGS disrupts the endosomal sorting pathway in Schwann cells, resulting in hypomyelination, aberrant myelin sheaths, and impairment of the ERBB2/3 receptor pathway. These findings suggest that defective endosomal trafficking of internalized cell surface receptors may be a common mechanism contributing to demyelinating CMT.