During spinal cord development, oligodendrocytes are generated from a restricted region of the ventral ventricular zone and then spread out into the entire spinal cord. These events are controlled by graded inductive and repressive signals derived from a local organizing center. Sonic hedgehog was identified as an essential ventral factor for oligodendrocyte lineage specification, whereas the dorsal cue was less clear. In this study, Wnt proteins were identified as the dorsal factors that directly inhibit oligodendrocyte development. Wnt signaling through a canonical beta-catenin pathway prevents its differentiation from progenitor to an immature state. Addition of rmFz-8/Fc, a Wnt antagonist, increased the number of immature oligodendrocytes in the spinal cord explant culture, demonstrating that endogenous Wnt signaling controls oligodendrocyte development.