Neonatal rat Schwann cells isolated in culture proliferate slowly and do not form a basement membrane although they express laminin continuously. We demonstrate here that isolated Schwann cells express other basement membrane components, including entactin and heparan sulfate proteoglycan. Treatment with ascorbate, and to a lesser extent with cyclic adenosine 3'',5''-monophosphate, modulates the synthesis of extracellular matrix components by cultured Schwann cells. After this treatment, fibronectin and collagen type IV are detected on the Schwann cell surface, which form, with the other components, a membrane-bound extracellular matrix. Electron microscopy shows that these elements are organized in a filamentous matrix which resembles a basement membrane and may be a precursor form of a basement membrane. We also show the effect of complete basement membrane matrices on Schwann cell behavior in culture. These matrices support Schwann cell proliferation in both serum-containing and serum-free media. The extracellular matrix from endothelial cells mimics fibronectin and induces a flat phenotype whereas the reconstituted basement membrane gel from the EHS tumor mimics laminin and allows an elongated phenotype. Thus, the basement membrane matrices interact with Schwann cells in vitro and may play an important role in Schwann cell proliferation in vivo.