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Peripheral myelin protein 22 (PMP22) is highly expressed in myelinating Schwann cells of the peripheral nervous system. genetic alterations cause the most common forms of Charcot-Marie-Tooth disease (CMTD), which is characterized by severe dysmyelination in the peripheral nerves. However, the functions of PMP22 in Schwann cell membranes remain unclear. We demonstrate that reconstitution of purified PMP22 into lipid vesicles results in the formation of compressed and cylindrically wrapped protein-lipid vesicles that share common organizational traits with compact myelin of peripheral nerves in vivo. The formation of these myelin-like assemblies depends on the lipid-to-PMP22 ratio, as well as on the PMP22 extracellular loops. Formation of the myelin-like assemblies is disrupted by a CMTD-causing mutation. This study provides both a biochemical assay for PMP22 function and evidence that PMP22 directly contributes to membrane organization in compact myelin.