Objective    To isolate and identify the peripheral blood derived mesenchymal stem cells (PBMSCs ) and the induction of it into Schwann cells in vitro. Methods: PBMSCs was isolated from SD rat blood, then special surface markers of the PBMSCs were identified by flow cytometry and immunocytochemistry. After the induction of PBMSCs towards Schwann cells successively with β-mercaptoethanol, all-trans retinoic acid and compound induce medium, the expression of S-100 or P75 was detected with immunocytochemistry.   Results    Flow Cytometry showed that the positive rates of CD11b, CD29, CD45, CD49d, CD90 and CD106 in cultured PBMSCs were 19.97%, 99.96%, 46.62%, 5.46%, 71.22% and 10.76% respectively. The immunocytochemistry demonstrated the negative expression of CD34 in PBMSCs. The percentage of the BrdU positive cells in PBMSCs was (34.1±4.3)% after BrdU treatment about 4h. The positive rates of S-100 and P75 were (75.2±4.1)% and (78.9±4.6)% respectively after inducing into Schwann cells.  Conclusions    Stem cells isolated from peripheral blood have the characteristics of mesenchymal stem cells, which can be induced into Schwann cells under specific conditions.