Sox10 is a high-mobility-group transcriptional regulator in early neural crest. Without Sox10, no glia develop throughout the peripheral nervous system. Here we show that Sox10 is restricted in the central nervous system to myelin-forming oligodendroglia. In Sox10-deficient mice progenitors develop, but terminal differentiation is disrupted. No myelin was generated upon transplantation of Sox10-deficient neural stem cells into wild-type hosts showing the permanent, cell-autonomous nature of the defect. Sox10 directly regulates myelin gene expression in oligodendrocytes, but does not control erbB3 expression as in peripheral glia. Sox10 thus functions in peripheral and central glia at different stages and through different mechanisms.