The knock-out analyses of neuregulin and its receptors have indicated that they play essential roles in Schwann cell development. However, the role they play in oligodendrocyte development in vivo has remained unclear, because such knock-out animals die before CNS myelination begins. We examined the role of neuregulin signaling in the CNS by generating transgenic mice that express a dominant-negative mutant of the ErbB2 receptor among oligodendrocytes, using an MBP promoter. The transgenic mice exhibited widespread hypomyelination, resulting from a reduction in oligodendrocyte differentiation. The number of progenitors was conversely increased in the transgenic mice. We report that a reduction in oligodendrocyte differentiation is attributed in part to apoptosis of oligodendrocyte progenitors as they exit the cell cycle. A significant reduction in the number of p27+ oligodendrocyte precursors in the transgenic mice supports this conclusion. Taken together, these data suggest that for oligodendrocyte progenitors, ErbB2 signaling plays a role in governing a properly timed exit from the cell cycle during development into myelinating oligodendrocytes.