Proper peripheral myelination depends upon the balance between Schwann cell proliferation and differentiation programs. The serine/threonine kinase mTOR integrates various environmental cues to serve as a central regulator of cell growth, metabolism, and function. We report here that tuberous sclerosis complex 1 (TSC1), a negative regulator of mTOR activity, establishes a stage-dependent program for Schwann cell lineage progression and myelination by controlling cell proliferation and myelin homeostasis. Tsc1 ablation in Schwann cell progenitors in mice resulted in activation of mTOR signaling, and caused over-proliferation of Schwann cells and blocked their differentiation, leading to hypomyelination. Transcriptome profiling analysis revealed that mTOR activation in Tsc1 mutants resulted in upregulation of a polo-like kinase (PLK)-dependent pathway and cell cycle regulators. Attenuation of mTOR or pharmacological inhibition of polo-like kinases partially rescued hypomyelination caused by Tsc1 loss in the developing peripheral nerves. In contrast, deletion of Tsc1 in mature Schwann cells led to redundant and overgrown myelin sheaths in adult mice. Together, our findings indicate stage-specific functions for the TSC1-mTOR-PLK signaling axis in controlling the transition from proliferation to differentiation and myelin homeostasis during Schwann cell development.