The plt (pale tremor) mouse carries a null mutation in the Fig4(Sac3) gene that results in tremor, hypopigmentation, spongiform degeneration of the brain, and juvenile lethality. FIG4 is a ubiquitously expressed phosphatidylinositol 3,5-bisphosphate phosphatase that regulates intracellular vesicle trafficking along the endosomal-lysosomal pathway. In humans, the missense mutation FIG4(I41T) combined with a FIG4 null allele causes Charcot-Marie-Tooth 4J disease, a severe form of peripheral neuropathy. Here we show that Fig4 null mice exhibit a dramatic reduction of myelin in the brain and spinal cord. In the optic nerve, smaller-caliber axons lack myelin sheaths entirely, whereas many large- and intermediate-caliber axons are myelinated but show structural defects at nodes of Ranvier, leading to delayed propagation of action potentials. In the Fig4 null brain and optic nerve, oligodendrocyte (OL) progenitor cells are present at normal abundance and distribution, but the number of myelinating OLs is greatly compromised. The total number of axons in the Fig4 null optic nerve is not reduced. Developmental studies reveal incomplete myelination rather than elevated cell death in the OL linage. Strikingly, there is rescue of CNS myelination and tremor in transgenic mice with neuron-specific expression of Fig4, demonstrating a non-cell-autonomous function of Fig4 in OL maturation and myelin development. In transgenic mice with global overexpression of the human pathogenic FIG4 variant I41T, there is rescue of the myelination defect, suggesting that the CNS of CMT4J patients may be protected from myelin deficiency by expression of the FIG4(I41T) mutant protein.