Aspartoacylase (ASPA) is an oligodendrocyte-restricted enzyme that catalyzes the hydrolysis of neuronally derived N-acetylaspartate (NAA) to acetate and aspartic acid. ASPA deficiency leads to the fatal childhood autosomal recessive leukodystrophy Canavan disease (CD). Here we demonstrate that the previously described ENU-induced nur7 mouse mutant is caused by a nonsense mutation, Q193X, in the Aspa gene (Aspa(nur7)). Homozygous Aspa(nur7nur7) mice do not express detectable Aspa protein and display an early-onset spongy degeneration of CNS myelin with increased NAA levels similar to that observed in CD patients. In addition, CNS regions rich in neuronal cell bodies also display vacuolization. Interestingly, distinct myelin rich areas, such as the corpus callosum, optic nerve, and spinal cord white matter appear normal in Aspa(nur7/nur7) mice. Reduced cerebroside synthesis has been demonstrated in CD patients and animal models. To determine the potential relevance of this observation in disease pathogenesis, we generated Aspa(nur7/nur7) mice that were heterozygous for a null allele of the gene that encodes the enzyme UDP-galactose:ceramide galactosyltransferase (Cgt), which is responsible for catalyzing the synthesis of the abundant myelin galactolipids. Despite reduced amounts of cerebrosides, the Aspa(nur7/nur7);Cgt(+/-) mice were not more severely affected than the Aspa(nur7) mutants, suggesting that diminished cerebroside synthesis is not a major contributing factor in disease pathogenesis. Furthermore, we found that myelin degeneration leads to significant axonal loss in the cerebellum of older Aspa(nur7) mutants. This finding suggests that axonal pathology caused by CNS myelin defects may underlie the neurological disabilities that CD patients develop at late stages of the disease.