The evolutionary demand for rapid nerve impulse conduction led to the process of myelination-dependent organization of axons into distinct molecular domains. These domains include the node of Ranvier flanked by highly specialized paranodal domains where myelin loops and axolemma orchestrate the axoglial septate junctions. These junctions are formed by interactions between a glial isoform of neurofascin (Nfasc(NF155)) and axonal Caspr and Cont. Here we report the generation of myelinating glia-specific Nfasc(NF155) null mouse mutants. These mice exhibit severe ataxia, motor paresis, and death before the third postnatal week. In the absence of glial Nfasc(NF155), paranodal axoglial junctions fail to form, axonal domains fail to segregate, and myelinated axons undergo degeneration. Electrophysiological measurements of peripheral nerves from Nfasc(NF155) mutants revealed dramatic reductions in nerve conduction velocities. By using inducible PLP-CreER recombinase to ablate Nfasc(NF155) in adult myelinating glia, we demonstrate that paranodal axoglial junctions disorganize gradually as the levels of Nfasc(NF155) protein at the paranodes begin to drop. This coincides with the loss of the paranodal region and concomitant disorganization of the axonal domains. Our results provide the first direct evidence that the maintenance of axonal domains requires the fence function of the paranodal axoglial junctions. Together, our studies establish a central role for paranodal axoglial junctions in both the organization and the maintenance of axonal domains in myelinated axons.