Our studies of oligodendrocyte development in the rodent optic nerve provide clues as to how cell numbers and the timing of differentiation may be controlled during mammalian development. Both cell number and the timing of differentiation depend on intracellular programs and extracellular signals, which together control cell survival and cell division. As the cells seem to compete for limiting amounts of both survival signals and mitogens, the levels of these extracellular signals must be tightly regulated, but it is not known how this is achieved. The timing of cell-cycle exit, and therefore the onset of differentiation, seems to depend in part on the progressive accumulation of the intracellular Cdk inhibitor p27/Kip1, but it is still unclear how the level of this protein is controlled over time in the dividing cells. The timing of cell-cycle exit is also regulated by thyroid hormone, which, along with other hormones, seems to coordinate the timing of development in various organs, much as the timing of the multiple changes in metamorphosis in both vertebrates and invertebrates is coordinated by hormones. In this sense, one might think of mammalian development as a prolonged metamorphosis.