Regenerative paradigms exhibit nerve dependency, including regeneration of the mouse digit tip and salamander limb. Denervation impairs regeneration and produces morphological aberrancy in these contexts, but the direct effect of innervation on the stem and progenitor cells enacting these processes is unknown. We devised a model to examine nerve dependency of the mouse skeletal stem cell (mSSC), the progenitor responsible for skeletal development and repair. We show that after inferior alveolar denervation, mandibular bone repair is compromised because of functional defects in mSSCs. We present mSSC reliance on paracrine factors secreted by Schwann cells as the underlying mechanism, with partial rescue of the denervated phenotype by Schwann cell transplantation and by Schwann-derived growth factors. This work sheds light on the nerve dependency of mSSCs and has implications for clinical treatment of mandibular defects.