During normal brain development, axons are myelinated by mature oligodendrocytes (OLGs). Under pathological, demyelinating conditions within the central nervous system (CNS), axonal remyelination is only partially successful because oligodendrocyte precursor cells (OPCs) largely remain in an undifferentiated state resulting in a failure to generate myelinating OLGs. Tissue Transglutaminase (TG2) is a multifunctional enzyme, which amongst other functions, is involved in cell differentiation. Therefore, we hypothesized that TG2 contributes to differentiation of OPCs into OLGs and thereby stimulates remyelination. In vivo studies, using the cuprizone model for de- and remyelination in TG2(-/-) and wild-type mice, showed that during remyelination expression of proteolipid protein mRNA, as a marker for remyelination, in the corpus callosum lags behind in TG2(-/-) mice resulting in less myelin formation and, moreover, impaired recovery of motor behavior. Subsequent in vitro studies showed that rat OPCs express TG2 protein and activity which reduces when the cells have matured into OLGs. Furthermore, when TG2 activity is pharmacologically inhibited, the differentiation of OPCs into myelin-forming OLGs is dramatically reduced. We conclude that TG2 plays a prominent role in remyelination of the CNS, probably through stimulating OPC differentiation into myelin-forming OLGs. Therefore, manipulating TG2 activity may represent an interesting new target for remyelination in demyelinating diseases.