Glial cells secrete proinflammatory mediators in the brain in response to exogenous stimuli such as infection and injury. Previously, we documented that systemic maternal lipopolysaccharide (LPS)-exposure at embryonic gestation day 18 causes oligodendrocyte (OL)-injury/hypomyelination in the developing brain which can be attenuated by N-acetyl cysteine (NAC; precursor of glutathione). The present study delineates the underlying mechanism of NAC-mediated attenuation of inhibition of OL development in LPS-stimulated mixed glial cultures. Factors released by LPS-stimulated mixed glial cultures inhibited OL development as shown by decrease in both proliferation 3bromo-deoxyuridine+/chondroitin sulfate proteoglycan-NG2+, hereafter BrdU+/NG+ and differentiation (O4+ and myelin basic protein+) of OL-progenitors. Correspondingly, an impairment of peroxisomal proliferation was shown by a decrease in the level of peroxisomal proteins in the developing OLs following exposure to LPS-conditioned media (LCM). Both NAC and WY14643, a peroxisome proliferator-activated receptor (PPAR)-alpha agonist attenuated these LCM-induced effects in OL-progenitors. Similar to WY14643, NAC attenuated LCM-induced inhibition of PPAR-alpha activity in developing OLs. Studies conducted with cytokines and diamide (a thiol-depleting agent) confirmed that cytokines are active agents in LCM which may be responsible for inhibition of OL development via peroxisomal dysfunction and induction of oxidative stress. These findings were further corroborated by similar treatment of developing OLs generated from PPAR-alpha(-/-) and wild-type mice or B12 oligodendroglial cells co-transfected with PPAR-alpha small interfering RNAs/pTK-PPREx3-Luc plasmids. Collectively, these data provide evidence that the modulation of PPAR-alpha activity, thus peroxisomal function by NAC attenuates LPS-induced glial factors-mediated inhibition of OL development suggesting new therapeutic interventions to prevent the devastating effects of maternal infections.