During myelination of the peripheral nervous system, the myelin protein zero (Mpz) gene is induced to produce the most abundant protein component (P(0)) of mature myelin. Although the basal embryonic expression of Mpz in Schwann cells has been attributed to regulation by Sox10, the molecular mechanism for the profound up-regulation of this gene during myelination has not been established. In this study, we have identified a highly conserved element within the first intron of the Mpz gene, which contains binding sites for the early growth response 2 (Egr2/Krox20) transcription factor, a critical regulator of peripheral nerve myelination. Egr2 can transactivate the intron element, and the induction is blocked by two known repressors of Egr2 activity. Using chromatin immunoprecipitation assays, we find that Egr2 binds in vivo to the intron element, but not to the Mpz promoter. Known inducers of Mpz expression such as forskolin and insulin-like growth factor-1 also activate the element in an Egr2-dependent manner. In addition, we found that Egr2 can act synergistically with Sox10 to activate this intron element, suggesting a model in which cooperative interactions between Egr2 and Sox10 mediate a large increase in Mpz expression to the high levels found in myelinating Schwann cells.