The vertebrate central nervous system (CNS) contains two major classes of macroglial cells, oligodendrocytes and astrocytes. Oligodendrocytes are responsible for the formation of myelin in the central nervous system, while the functions of astrocytes are more diverse and less well established. Recent studies have provided new insights into when, where and how these different classes of cell arise during CNS development. The founder cells of the oligodendrocyte lineage initially arise in distinct regions of the ventricular zone during early development as the result of local signals including sonic hedgehog. In the spinal cord, oligodendrocyte precursors appear to share a developmental lineage with motor neurons, although they may also develop from restricted glial precursors. Immature oligodendrocyte precursors are highly migratory. They migrate from their site of origin to developing white matter tracts using a variety of guidance cues including diffusible chemorepellents. The majority of oligodendrocyte precursor proliferation occurs in developing white matter as a result of the local expression of mitogenic signals. Oligodendrocyte precursor cell proliferation is regulated by a number of distinct growth factors that act at distinct stages in the lineage and whose activity is modulated by synergy with other molecules including chemokines. The final matching of oligodendrocyte and axon number is accomplished through a combination of local regulation of cell proliferation, differentiation and cell death. Not all oligodendrocyte precursors differentiate during development, and the adult CNS contains a significant population of precursors. Understanding the regulation of oligodendrogenesis will facilitate the use of these endogenous precursors to enhance repair in a variety of pathological conditions.