Efficient neurotransmission is essential for organism survival and is enhanced by myelination. However, the genes that regulate myelin and myelinating glial cell development have not been fully characterized. Data from our lab and others demonstrates that cd59, which encodes for a small GPI-anchored glycoprotein, is highly expressed in developing zebrafish, rodent, and human oligodendrocytes (OLs) and Schwann cells (SCs), and that patients with CD59 dysfunction develop neurological dysfunction during early childhood. Yet, the function of Cd59 in the developing nervous system is currently undefined. In this study, we demonstrate that cd59 is expressed in a subset of developing SCs. Using cd59 mutant zebrafish, we show that developing SCs proliferate excessively and nerves may have reduced myelin volume, altered myelin ultrastructure, and perturbed node of Ranvier assembly. Finally, we demonstrate that complement activity is elevated in cd59 mutants and that inhibiting inflammation restores SC proliferation, myelin volume, and nodes of Ranvier to wildtype levels. Together, this work identifies Cd59 and developmental inflammation as key players in myelinating glial cell development, highlighting the collaboration between glia and the innate immune system to ensure normal neural development.