The myelin sheath is formed as individual cells extend their plasma membranes around the axons of neurons in a spiral fashion. In the central nervous system, these are called oligodendroglial cells, while in the peripheral nervous system, they are called Schwann cells.
The myelin sheath provides insulation for the electrical signals traveling through nerve cells. It takes many cells to fully insulate a single axon. These cells have small gaps between them, called the nodes of Ranvier, which are critical to their function.
The insulation the myelin sheath provides is not the same as the insulation around artificial electrical wiring. These sheaths make the electrochemical signal through the nerve axons travel faster than they would otherwise. In nerve fibers with myelin sheaths, signals travel at a speed proportional to the fiber's diameter, while in unmyelinated fibers, signals travel at a speed proportional to the square root of the diameter.
Myelin sheaths have a structure of alternating protein and lipid layers. In the peripheral nervous system, myelin sheaths may form up to 100 layers. The cells that form the sheaths have cell membranes flattened into a spade shape, which rolls around the nerve fiber in a manner akin to a rolled-up sleeping bag.