The tumor predisposition disease neurofibromatosis type I (NF1) is one of the most common genetic disorders, affecting 1 in 3,000 individuals. Cutaneous and plexiform neurofibromas, as well as malignant peripheral nerve sheath tumors, are serious complications of NF1. Neurofibromas are complex nerve tumors and are composed mainly of abnormal local cells including Schwann cells, nerves, endothelial cells, fibroblasts, and a large number of infiltrating mast cells. Currently, little is known about the mechanisms mediating the initiation and progression of these tumors, or the identity of the specific cell type that gives rise to neurofibromas. Recent work in our laboratory has identified a novel population of neural stem cells residing in the dermis termed skin-derived precursors (SKPs) as the cell of origin of dermal neurofibroma and generated a novel mouse model for this complex tumor. These studies also provide evidences that additional signals from the tumor microenvironment play essential roles in neurofibroma formation. In the present application, we propose to elucidate the cellular pathogenesis of neurofibroma. We put forward plans to define the cellular interactions between the tumor Schwann cells and their microenvironment and propose novel therapy aimed at delaying or preventing cutaneous tumor formation in NF1 patients. These research plans are novel because we have uncovered unique paracrine interactions between the neoplastic cells (the Schwann cells) and its microenvironment that are required for tumor formation, which could lead directly to new and potentially effective therapeutics for NF1, where none exist today. In addition, while focused on neurofibroma, this work raises the exciting possibility that the surrounding non-neoplastic cells in the tumor environment may also impact the growth of other tumor types. An increased understanding of the role of non-neoplastic tumor-associated cells may lead to new directions for cancer therapy and prevention.