The bipotential progenitor cells (O-2A progenitors) that produce oligodendrocytes and type-2 astrocytes in the developing rat optic nerve are induced to proliferate in culture by type-1 astrocytes. Here, we show that the astrocyte-derived mitogen is platelet-derived growth factor (PDGF). PDGF is a potent mitogen for O-2A progenitor cells in vitro. Mitogenic activity in astrocyte-conditioned medium comigrates with PDGF on a size-exclusion column, competes with PDGF for receptors, and is neutralized by antibodies to PDGF. PDGF dimers can be immunoprecipitated from astrocyte-conditioned medium, and mRNA encoding PDGF is present in rat brain throughout gliogenesis. We propose that astrocyte-derived PDGF is crucial for the control of myelination in the developing central nervous system.