Haploinsufficiency of peripheral myelin protein 22 (PMP22) causes hereditary neuropathy with liability to pressure palsies, a peripheral nerve lesion induced by minimal trauma or compression. As PMP22 is localized to cholesterol-enriched membrane domains that are closely linked with the underlying actin network, we asked whether the myelin instability associated with PMP22 deficiency could be mediated by involvement of the protein in actin-dependent cellular functions and/or lipid raft integrity. In peripheral nerves and cells from mice with PMP22 deletion, we assessed the organization of filamentous actin (F-actin), and actin-dependent cellular functions. Using in vitro models, we discovered that, in the absence of PMP22, the migration and adhesion capacity of Schwann cells and fibroblasts are similarly impaired. Furthermore, PMP22-deficient Schwann cells produce shortened myelin internodes, and display compressed axial cell length and collapsed lamellipodia. During early postnatal development, F-actin-enriched Schmidt-Lanterman incisures do not form properly in nerves from PMP22^−/− mice, and the expression and localization of molecules associated with uncompacted myelin domains and lipid rafts, including flotillin-1, cholesterol, and GM1 ganglioside, are altered. In addition, we identified changes in the levels and distribution of cholesterol and ApoE when PMP22 is absent. Significantly, cholesterol supplementation of the culture medium corrects the elongation and migration deficits of PMP22^−/− Schwann cells, suggesting that the observed functional impairments are directly linked with cholesterol deficiency of the plasma membrane. Our findings support a novel role for PMP22 in the linkage of the actin cytoskeleton with the plasma membrane, likely through regulating the cholesterol content of lipid rafts.