Abrupt osmotic changes during rapid correction of chronic hyponatremia result in demyelinative brain lesions, but the sequence of events linking rapid osmotic changes to myelin loss is not yet understood. Here, in a rat model of osmotic demyelination syndrome, we found that massive astrocyte death occurred after rapid correction of hyponatremia, delineating the regions of future myelin loss. Astrocyte death caused a disruption of the astrocyte-oligodendrocyte network, rapidly upregulated inflammatory cytokines genes, and increased serum S100B, which predicted clinical manifestations and outcome of osmotic demyelination. These results support a model for the pathophysiology of osmotic brain injury in which rapid correction of hyponatremia triggers apoptosis in astrocytes followed by a loss of trophic communication between astrocytes and oligodendrocytes, secondary inflammation, microglial activation, and finally demyelination.