The physical processes involved in diffusion of Galactic cosmic rays in the interstellar medium are addressed. We study the possibility that the nonlinear MHD cascade sets the power-law spectrum of turbulence which scatters charged energetic particles. We find that the dissipation of waves due to the resonant interaction with cosmic ray particles may terminate the Kraichnan-type cascade below wavelengths 10(sup 13) cm. The effect of this wave dissipation has been incorporated in the GALPROP numerical propagation code in order to asses the impact on measurable astrophysical data. The energy-dependence of the cosmic-ray diffusion coefficient found in the resulting self-consistent model may explain the peaks in the secondary to primary nuclei ratios observed at about 1 GeV/nucleon.