The myelin sheath surrounding axons ensures that nerve impulses travel quickly and efficiently, allowing for the proper function of the vertebrate nervous system. We previously showed that the adhesion G-protein-coupled receptor (aGPCR) Gpr126 is essential for peripheral nervous system myelination, although the molecular mechanisms by which Gpr126 functions were incompletely understood. aGPCRs are a significantly understudied protein class, and it was unknown whether Gpr126 couples to G-proteins. Here, we analyze Dhh(Cre);Gpr126(fl/fl) conditional mutants, and show that Gpr126 functions in Schwann cells (SCs) for radial sorting of axons and myelination. Furthermore, we demonstrate that elevation of cAMP levels or protein kinase A activation suppresses myelin defects in Gpr126 mouse mutants and that cAMP levels are reduced in conditional Gpr126 mutant peripheral nerve. Finally, we show that GPR126 directly increases cAMP by coupling to heterotrimeric G-proteins. Together, these data support a model in which Gpr126 functions in SCs for proper development and myelination and provide evidence that these functions are mediated via G-protein-signaling pathways.