A new procedure for isolating oligodendrocytes from ovine white matter is described. The method separates oligodendrocytes into two bands on a linear sucrose gradient. Five criteria have been employed to classify the separated cells. It is shown by indirect immunofluorescence with specific antisera that 97% of the cells from both bands carry galactocerebroside, a specific surface marker for oligodendrocytes, on their plasma membranes and 95% of the cells retain myelin basic protein as distinct patches on their surfaces. Isolated cells conform ultrastructurally to current concepts of oligodendrocytes. The cells incorporate [3H]galactose into galactocerebroside and carrier free H2(35)SO4 into sulfatide, specific markers for oligodendrocytes. The specific activity of 2',3'-cyclic nucleotide-3'-phosphodiesterase in the two cell fractions is comparable to that reported for isolated oligodendrocytes by others. It is concluded that conservatively, 95% of the cells in both fractions are oligodendrocytes. Cells from both bands survive in culture for months. In vitro the cells extend two or more processes, contain 'gliosomes', and surround themselves with extensive sheet-like membranes; i.e. they exhibit the morphological characteristics ascribed to oligodendrocytes in explant cultures. Conservatively 90% of cultured cells stain with an antimyelin basic protein serum. The staining is localized in the cytoplasm and processes. The cells also stain with antigalactocerebroside and antioligodendrocyte sera. Cells remain differentiated for up to 70 days in vitro as evidenced by their incorporation of [3H]galactose and H2(35)SO4 into galactosyl and sulfogalactosylceramide, respectively.