Glial cells regulate multiple aspects of synaptogenesis. In the absence of Schwann cells, a peripheral glial cell, motor neurons initially innervate muscle but then degenerate. Here, using a genetic approach, we show that neural activity-regulated negative factors produced by muscle drive neurodegeneration in Schwann cell-deficient mice. We find that thrombin, the hepatic serine protease central to the hemostatic coagulation cascade, is one such negative factor. Trancriptomic analysis shows that expression of the antithrombins serpin C1 and D1 is significantly reduced in Schwann cell-deficient mice. In the absence of peripheral neuromuscular activity, neurodegeneration is completely blocked, and expression of prothrombin in muscle is markedly reduced. In the absence of muscle-derived prothrombin, neurodegeneration is also markedly reduced. Together, these results suggest that Schwann cells regulate NMJs by opposing the effects of activity-regulated, muscle-derived negative factors and provide the first genetic evidence that thrombin plays a central role outside of the coagulation system.