Oligodendrocyte precursor (OP) cells give rise to mature oligodendrocytes (OL), which are necessary for myelination of axons during CNS development and following damage to the myelin sheath that occurs in demyelinating diseases. To facilitate studies designed to understand OP maturation and OL function, we have developed OP cells that can be grown continuously, expanded, and differentiated into mature OLs. Cultures of late passage mOP cells grown in proliferation medium are highly pure early stage oligodendrocyte precursors where > 90% assume a characteristic bipolar morphology. Immunocytochemical analysis using antibodies that recognize progressive stages of OP maturation (A2B5, NG2, GD3 and O4) confirmed that mOP cells have a stable early stage OP cell phenotype. In addition, mOP cells can be induced to differentiate into mature forms of oligodendrocytes in vitro and in vivo, as characterized morphologically by the presence of multiple processes with secondary and tertiary branches, and by immunostaining and quantitative real-time PCR for the mature oligodendrocyte markers MBP, MAG, PLP, and MOBP. Finally, differentiation of mOP cells was accompanied by up-regulation of mRNA encoding Olig2 but not Olig1, which is consistent with previous findings showing that Olig2 is necessary for specification of oligodendrocytes. These new mOP cells should significantly benefit in vitro and in vivo studies on OP maturation and function.