Although diabetic mice have been studied for decades, little is known about the cell type specific contributions to diabetic neuropathy (DN). Schwann cells (SCs) myelinate and provide trophic support to peripheral nervous system axons. Altered SC metabolism leads to myelin defects, which can be seen both in inherited and DNs. How SC metabolism is altered in DN is not fully understood, but it is clear that insulin resistance underlies impaired lipid metabolism in many cell types throughout the body via the phosphoinositide 3‐kinase/protein kinase b (PKB)/mammalian target of rapamycin (PI3K/AKT/mTOR) pathway. Here, we created an insulin resistant SC by deleting both insulin receptor (INSR) and insulin‐like growth factor receptor 1 (IGF1R), to determine the role of this signaling pathway in development and response to injury in order to understand SC defects in DN. We found that myelin is thinner throughout development and adulthood in INSR/IGF1R Schwann cell specific knock out mice. The nerves of these mutant mice had reduced expression of key genes that mediate fatty acid and cholesterol synthesis due to reduced mTOR–sterol regulatory element‐binding protein signaling. In adulthood, these mice show sensory neuropathy phenotypes reminiscent of diabetic mice. Altogether, these data suggest that SCs may play an important role in DN and targeting their metabolism could lead to new therapies for DN.