Transplanted olfactory ensheathing cells (OECs) are able to remyelinate demyelinated axons and support regrowth of transected axons after transplantation into the adult CNS. Transplanted Schwann cells (SCs) share these repair properties but have limitations imposed on their behavior by the presence of astrocytes (ACs). Because OECs exist alongside astrocytes in the olfactory bulb, we have hypothesized that they have advantages over SCs in transplant-mediated CNS repair due to an increased ability to integrate and migrate within an astrocytic environment. In this study, we have tested this hypothesis by comparing the interactions between astrocytes and either SCs or OECs, using a range of in vitro assays. We have shown that (1) astrocytes and SCs segregate into defined non-overlapping domains in co-culture, whereas astrocytes and OECs freely intermingle; (2) both SCs and OECs will migrate across astrocyte monolayers, but only OECs will migrate into an area containing astrocytes; (3) SCs spend less time in contact with astrocytes than do OECs; and (4) astrocytes undergo hypertrophy when in contact with SCs, but not with OECs. Expression of N-cadherin has been implicated as a key mediator of the failure of SCs to integrate with astrocytes. However, we found no differences in the intensity of N-cadherin immunoreactivity between SCs and OECs, suggesting that it is not the adhesion molecule that accounts for the observed differences. In addition, the number of astrocytes expressing chondroitin sulfate proteoglycans (CSPG) is increased when astrocytes are co-cultured with Schwann cells compared with the number when astrocytes are grown alone or with OECs. Taken together, these data support the hypothesis that OECs will integrate more extensively than Schwann cells in astrocytic environments and are therefore better candidates for transplant-mediated repair of the damaged CNS.