The number of Schwann cells is fitted to axonal length in peripheral nerves. This relationship is lost when tumorigenic stimuli induce uncontrolled Schwann cell proliferation, generating tumours such us neurofibromas and schwannomas. Schwann cells also re-enter the cell cycle following nerve injury during the process of Wallerian degeneration. In both cases proliferation is finally arrested. We show that in neurofibroma, the induction of Jmjd3 (jumonji domain containing 3, histone lysine demethylase) removes trimethyl groups on lysine-27 of histone-H3 and epigenetically activates the Ink4a/Arf-locus, forcing Schwann cells towards replicative senescence. Remarkably, blocking this mechanism allows unrestricted proliferation, inducing malignant transformation of neurofibromas. Interestingly, our data suggest that in injured nerves, Schwann cells epigenetically activate the same locus to switch off proliferation and enter the senescence programme. Indeed, when this pathway is genetically blocked, Schwann cells fail to drop out of the cell cycle and continue to proliferate. We postulate that the Ink4a/Arf-locus is expressed as part of a physiological response that prevents uncontrolled proliferation of the de-differentiated Schwann cell generated during nerve regeneration, a response that is also activated to avoid overproliferation after tumorigenic stimuli in the peripheral nervous system.