Olig2 transcription factor is widely expressed throughout the central nervous system; therefore, it is considered to have multiple functions in the developing, mature and injured brain. In this mini-review, we focus on Olig2 in the forebrain (telencephalon and diencephalon) and discuss the functional significance of Olig2 and the differentiation properties of Olig2-expressing progenitors in the development and injured states. Short- and long-term lineage analysis in the developing forebrain elucidated that not all late Olig2+ cells are direct cohorts of early cells and that Olig2 lineage cells differentiate into neurons or glial cells in a region- and stage-dependent manner. Olig2-deficient mice revealed large elimination of oligodendrocyte precursor cells and a decreased number of astrocyte progenitors in the dorsal cortex, whereas no reduction in the number of GABAergic neurons. In addition to Olig2 function in the developing cortex, Olig2 is also reported to be important for glial scar formation after injury. Thus, Olig2 can be essential for glial differentiation during development and after injury.