Chondroitin sulfate (CS) and dermatan sulfate (DS) proteoglycans are major components of the extracellular matrix implicated in neural development, plasticity and regeneration. While it is accepted that CS are major inhibitors of neural regeneration, the contributions of DS to regeneration have not been assessed. To enable a novel approach in studies on DS versus CS roles during development and regeneration, we generated a mouse deficient in the dermatan 4-O-sulfotransferase1 (Chst14(-/-)), a key enzyme in the synthesis of iduronic acid-containing modules found in DS but not CS. In wild-type mice, Chst14 is expressed at high levels in the skin and in the nervous system, and is enriched in astrocytes and Schwann cells. Ablation of Chst14, and the assumed failure to produce DS, resulted in smaller body mass, reduced fertility, kinked tail and increased skin fragility compared with wild-type (Chst14(+/+)) littermates, but brain weight and gross anatomy were unaffected. Neurons and Schwann cells from Chst14(-/-) mice formed longer processes in vitro, and Chst14(-/-) Schwann cells proliferated more than Chst14(+/+) Schwann cells. After femoral nerve transection/suture, functional recovery and axonal regrowth in Chst14(-/-) mice were initially accelerated but the final outcome 3months after injury was not better than that in Chst14(+/+) littermates. These results suggest that while Chst14 and its enzymatic products might be of limited importance for neural development, they may contribute to the regeneration-restricting environment in the adult mammalian nervous system.