Oligodendrocytes develop from a subpopulation of precursor cells within the ventral ventricular zone of the spinal cord. The molecular cues that direct this spatially and temporally restricted event seem to originate in part from structures ventral to and within the spinal cord. Here, we present evidence that the family of ligands termed neuregulins are necessary for the normal generation of mouse spinal cord oligodendrocytes. Oligodendrocytes mature in spinal cord explants from wild-type mice and mice heterozygotic for a null mutation in the neuregulin gene (NRG +/-) in a temporal sequence of developmental events that replicates that observed in vivo. However, in spinal cord explants derived from mice lacking neuregulin (NRG -/-), oligodendrocytes fail to develop. Addition of recombinant neuregulin to spinal cord explants from NRG -/- mice rescues oligodendrocyte development. In wild-type spinal cord explants, inhibitors of neuregulin mimic the inhibition of oligodendrocyte development that occurs in NRG -/- explants. In embryonic mouse spinal cord, neuregulins are present in motor neurons and the ventral ventricular zone where they likely exert their influence on early oligodendrocyte precursor cells.