Several psychiatric disorders are associated with aberrant white matter development, suggesting oligodendrocyte and myelin dysfunction in these diseases. There are indications that radial glial cells (RGCs) are involved in initiating myelination, and may contribute to the production of oligodendrocyte progenitor cells (OPCs) in the dorsal cortex. Liver X receptors (LXRs) are involved in maintaining normal myelin in the central nervous system (CNS), however, their function in oligodendrogenesis and myelination is not well understood. Here, we demonstrate that loss of LXRβ function leads to abnormality in locomotor activity and exploratory behavior, signs of anxiety and hypomyelination in the corpus callosum and optic nerve, providing in vivo evidence that LXRβ deletion delays both oligodendrocyte differentiation and maturation. Remarkably, along the germinal ventricular zone-subventricular zone and corpus callosum there is reduced OPC production from RGCs in LXRβ(-/-) mice. Conversely, in cultured RGC an LXR agonist led to increased differentiation into OPCs. Collectively, these results suggest that LXRβ, by driving RGCs to become OPCs in the dorsal cortex, is critical for white matter development and CNS myelination, and point to the involvement of LXRβ in psychiatric disorders.