Canavan's disease (CD) is a fatal, hereditary disorder of CNS development that has been linked to mutations in the gene for the enzyme aspartoacylase (ASPA) (EC 3.5.1.15). ASPA acts to hydrolyze N-acetylaspartate (NAA) into l-aspartate and acetate, but the connection between ASPA deficiency and the failure of proper CNS development is unclear. We hypothesize that one function of ASPA is to provide acetate for the increased lipid synthesis that occurs during postnatal CNS myelination. The gene encoding ASPA has been inactivated in the mouse model of CD, and here we show significant decreases in the synthesis of six classes of myelin-associated lipids, as well as reduced acetate levels, in the brains of these mice at the time of peak postnatal CNS myelination. Analysis of the lipid content of white matter from a human CD patient showed decreased cerebroside and sulfatide relative to normal white matter. These results demonstrate that myelin lipid synthesis is significantly compromised in CD and provide direct evidence that defective myelin synthesis, resulting from a deficiency of NAA-derived acetate, is involved in the pathogenesis of CD.