The phosphatase FIG4 regulates the concentration of phosphatidylinositol 3,5-diphosphate (PI3,5P2), a molecule critical for endosomal/lysosomal membrane trafficking and neuron function. We investigated Fig4 expression in the developing CNS of mice and rats using Western blot, real-time polymerase chain reaction, and morphological techniques in situ and in vitro and after spinal cord injury. Fig4 was expressed at a high levels throughout development in myelinating cells, particularly Schwann cells, and dorsal root ganglia sensory neurons. Fig4 protein and mRNA in CNS neurons were markedly diminished in adult versus embryonal animals. Spinal cord hemisection induced upregulation of Fig4 in adult spinal cord tissues that was associated with accumulation of lysosomes in neurons and glia. This accumulation appeared similar to the abnormal lysosomal storage observed in dorsal root ganglia of young fig4-null mice. The results suggest that Fig4 is involved in normal neural development and the maintenance of peripheral nervous system myelin. We speculate that adequate levels of Fig4 may be required to prevent neurons and glia from excessive lysosomal accumulation after injury and in neurodegeneration.