Myelin is a fatty white substance that surrounds the axon dielectric (electrically insulating) material that forms a layer, the myelin sheath, usually around only the axon of a neuron. It is essential for the proper functioning of the nervous system.It is an outgrowth of a type of glial cell.The production of the myelin sheath is called myelination. In humans, myelination begins in the 14th week of fetal development, although little myelin exists in the brain at the time of birth.yelin is considered a defining characteristic of the (gnathostome) vertebrates, but myelin-like sheaths have also been seen in some invertebrates, although they are quite different from vertebrate myelin at the molecular level. Myelin was discovered in 1854 by Rudolf Virchow.