The oligodendrocyte precursor cell (OPC) arises from the subventricular zone (SVZ) during early vertebrate development to migrate and proliferate along axon tracts before differentiating into the myelin-forming oligodendrocyte. We demonstrate that the spatial and temporal regulation of oligodendrocyte differentiation depends intimately on the axonal microenvironment and the density of precursor cells along a specified axonal area. Differentiation does not require dynamic axonal signaling, but instead is induced by packing constraints resulting from intercellular interactions. Schwann cells and even artificial beads bound to the axonal surface can mimic these constraints and promote differentiation. Together, these results describe the coordinately controlled biophysical interaction of oligodendrocyte precursors within an axonal niche leading to self-renewal and differentiation.myelination ͉ neuronal-glial interactions ͉ mechanotransduction D amage to the myelin membrane, as a result of nerve injury or disease, significantly impairs the ability of the nervous system to communicate and can lead to a host of debilitating symptoms, as well as an ultimate loss of function. In the CNS, demyelination is accompanied by the loss of oligodendrocytes, the terminally differentiated cells responsible for the formation of the myelin sheath. After the initial onset of demyelination, OPCs are induced to differentiate and remyelinate, effectively replacing lost oligodendrocytes. Unfortunately, the capacity for remyelination is limited, and ultimately fails in the presence of chronic demyelination. It remains unclear why the CNS cannot sustain this initial ability to repair the myelin sheath. One possible explanation is that adult OPCs eventually lose their ability to differentiate into remyelinating oligodendrocytes (1). It is plausible that the continuous presence of a demyelinating environment is responsible for inhibiting the differentiation process. If this supposition is true, then it is imperative to identify the environmental conditions conducive to the ongoing production of oligodendrocytes.Examining oligodendrocyte generation during development could prove useful for determining the role of the environment in the induction of differentiation. Developing OPCs are proliferative and self-renewing cells that originate in the SVZ and migrate along axons throughout the CNS. During development, an OPC must decide how many times it will divide, and where it will migrate. Also, an OPC must choose whether to remain as a precursor cell into adulthood or to differentiate into a myelinating oligodendrocyte. Such complex decisions are likely to be heavily influenced by the nature of the surrounding environment and by the behavior of neighboring cells. Based on these assumptions, it is our goal to identify the environmental factors that influence the decision of an OPC to differentiate into an oligodendrocyte. To accomplish this goal, we first looked at the developing rat spinal cord to examine the temporal regulation of oligodendrocy...