FTY720 is a sphingosine 1-phosphate receptor (S1PR) modulator used as a daily therapy to reduce disease activity in the relapsing form of multiple sclerosis (MS). FTY720 readily accesses the CNS. Previous studies have shown that phosphorylated FTY720 (FTY720-p) enhances oligodendrocyte progenitor cell (OPC) survival, differentiation, and remyelination following experimentally induced demyelination in rodents. To elucidate the underlying mechanism, human fetal OPCs alone or in co-culture with rat dorsal root ganglia neurons (DRGN) were treated daily with FTY720-p, a condition that desensitizes cellular responses to S1P, the natural ligand of S1PR. In co-cultures, FTY720-p and S1P given daily or every three days increased the number of O1/MBP double positive cells and axonal ensheathment. In cultures composed of PDGFRĪ±-antibody selected cells alone, daily application of FTY720-p also increased the number of O4/GC double positive cells. At an early time point (day 2), FTY720-p activated ERK1/2, CREB and p38MAPK in O4-positive cells, as well as in Ī²-III Tubulin positive neurons and GFAP positive astrocytes. In later cultures (day 6), FTY720-p activated p38MAPK in O4 positive cells, p38MAPK and ERK1/2 in neurons, and p38MAPK, ERK1/2 and CREB in astrocytes. A MEK inhibitor (U0126) prevented the differentiation of OPCs into O4-positive cells, while a p38MAPK inhibitor (PD169316) blocked progression into O4-positive and into GC-positive stages of differentiation. Our results demonstrate that FTY720-p, under conditions that model daily clinical use, can act directly on OPCs to impact differentiation, and also indirectly via neurons and astrocytes by activating ERK1/2 and p38MAPK.