We have previously isolated epidermal growth factor (EGF)-responsive multipotent progenitor cells from the early postnatal rodent cerebral cortex independent of generative zones. In this study we have examined the mechanisms regulating the generation of differentiated oligodendrocytes (OLs) from these multipotent cells. Although cultures of primary cortical OL progenitor cells propagated at clonal density spontaneously gave rise to differentiated OLs in defined medium, cultures of multipotent progenitors isolated from identical regions supported the elaboration of OL progenitors but not differentiated OLs. These observations indicate that the terminal maturation of OL progenitors derived from multipotent cells is dependent on signals present within the cellular environment. Application of cytokines such as basic fibroblast growth factor (bFGF), platelet-derived growth factor (PDGF), or neurotrophin 3 (NT3) to clonal density cultures of cortical multipotent progenitors increased the proportion of OL progenitors but failed to support the generation of differentiated OLs. By contrast, application of factors that activate gp130/leukemia inhibitory factor beta (LIFbeta) heterodimeric receptors, such as ciliary neurotrophic factor (CNTF), activated signal transducers and activators of transcription-3 in these OL progenitor cells and promoted the generation of differentiated OLs. Clonal analysis also demonstrated that CNTF directly targets OL progenitors derived from the multipotent cells. These observations suggest that two distinct progenitor cell pathways contribute to the generation of differentiated OLs during postnatal cortical gliogenesis. Although oligodendroglial maturation of classical OL progenitor cells is driven by cell autonomous mechanisms, our findings demonstrate that the generation of differentiated OLs from cortical multipotent progenitor cells is dependent on environmental cues, including activation of gp130/LIFbeta receptors.