CNS inflammation triggers activation of the integrated stress response (ISR). We previously reported that prolonging the ISR protects remyelinating oligodendrocytes and promotes remyelination in the presence of inflammation (Chen et al., eLife , 2021). However, the exact mechanisms through which this occurs remain unknown. Here, we investigated whether the ISR modulator Sephin1 in combination with the oligodendrocyte differentiation enhancing reagent bazedoxifene (BZA) is able to accelerate remyelination under inflammation, and the underlying mechanisms mediating this pathway. We find that the combined treatment of Sephin1 and BZA is sufficient to accelerate early-stage remyelination in mice with ectopic IFN-γ expression in the CNS. IFN-γ, which is a critical inflammatory cytokine in multiple sclerosis (MS), inhibits oligodendrocyte precursor cell (OPC) differentiation in culture and triggers a mild ISR. Mechanistically, we further show that BZA promotes OPC differentiation in the presence of IFN-γ, while Sephin1 enhances the IFN-γ-induced ISR by reducing protein synthesis and increasing RNA stress granule formation in differentiating oligodendrocytes. Finally, the ISR suppressor 2BAct is able to partially lessen the beneficial effect of Sephin1 on disease progression, in an MS mouse model of experimental autoimmune encephalitis (EAE). Overall, our findings uncover distinct mechanisms of action of BZA and Sephin1 on oligodendrocyte lineage cells under inflammatory stress, suggesting that a combination therapy may effectively promote restoring neuronal function in MS patients.