The various cell types in a multicellular animal differentiate on a predictable schedule but the mechanisms responsible for timing cell differentiation are largely unknown. We have studied a population of bipotential glial (O-2A) progenitor cells in the developing rat optic nerve that gives rise to oligodendrocytes beginning at birth and to type-2 astrocytes beginning in the second postnatal week. Whereas, in vivo, these O-2A progenitor cells proliferate and give rise to postimitotic oligodendrocytes over several weeks, in serum-free (or low-serum) culture they stop dividing prematurely and differentiate into oligodendrocytes within two or three days. The normal timing of oligodendrocyte development can be restored if embryonic optic-nerve cells are cultured in medium conditioned by type-1 astrocytes, the first glial cells to differentiate in the nerve: in this case the progenitor cells continue to proliferate, the first oligodendrocytes appear on the equivalent of the day of birth, and new oligodendrocytes continue to develop over several weeks, just as in vivo. Here we show that platelet-derived growth factor (PDGF) can replace type-1-astrocyte-conditioned medium in restoring the normal timing of oligodendrocyte differentiation in vitro and that anti-PDGF antibodies inhibit this property of the appropriately conditioned medium. We also show that PDGF is present in the developing optic nerve. These findings suggest that type-1-astrocyte-derived PDGF drives the clock that times oligodendrocyte development.