Oligodendrocytes and type-2 astrocytes develop sequentially from O-2A progenitor cells in the rat CNS. We have reproduced this sequential development in a simplified, serum-free in vitro system: in cultures of newborn optic nerve cells treated with platelet-derived growth factor to maintain O-2A progenitor cell proliferation, progenitor cells differentiate into oligodendrocytes during the first week in vitro and into type-2 astrocytes during the second week. Thus all of the signals needed for type-2 astrocyte development are made by serum-free optic nerve cultures, indicating that neurons are not required. By manipulating the cellular composition of the cultures, we provide evidence that type-2 astrocyte development does not depend on oligodendrocytes, but instead requires non-O-2A lineage cells, which are also responsible for timing this development.