Schwann cell dedifferentiation from a myelinating to a progenitor-like cell underlies the remarkable ability of peripheral nerves to regenerate following injury. However, the molecular identity of the differentiated and dedifferentiated states in vivo has been elusive. Here, we profiled Schwann cells acutely purified from intact nerves and from the wound and distal regions of severed nerves. Our analysis reveals novel facets of the dedifferentiation response, including acquisition of mesenchymal traits and a Myc module. Furthermore, wound and distal dedifferentiated Schwann cells constitute different populations, with wound cells displaying increased mesenchymal character induced by localized TGFβ signaling. TGFβ promotes invasion and crosstalks with Eph signaling via N-cadherin to drive collective migration of the Schwann cells across the wound. Consistently, Tgfbr2 deletion in Schwann cells resulted in misdirected and delayed reinnervation. Thus, the wound microenvironment is a key determinant of Schwann cell identity, and it promotes nerve repair through integration of multiple concerted signals.