Structurally normal myelin sheaths develop in the spinal cord of juvenile myelin-deficient rats (mdr) 11 days after transplantation of normal fetal spinal cord fragments or cultured cells that do not yet express galactocerebroside. Cultures result in more extensive myelin formation, and in both cases the myelin that forms is located primarily at or near the site of transplantation. Myelin formation also occurs after transplantation of postnatal donor tissue, but the extent diminishes with donor age, and none was seen after transplantation of adult donor tissue over the two-week period studied. Injection of killed tissue, tissue derived from mouse donors or an extract of myelin also did not lead to myelin formation. The results imply that myelin formed in the host following transplantation was generated by oligodendrocytes newly differentiated from donor precursor cells rather than by donor oligodendrocytes that were already mature at the time of transplantation or by host oligodendrocytes that took up components of the injected material. We conclude that exogenous fetal glial cell precursors are able to survive, differentiate and form myelin in the environment of the juvenile mdr spinal cord.