The rat optic nerve contains three types of macroglial cells: type 1 astrocytes first appear at embryonic day 16 (E16), oligodendrocytes at birth (E21), and type 2 astrocytes between postnatal days 7 and 10. The oligodendrocytes and type 2 astrocytes develop from a common, bipotential O-2A progenitor cell. We show here that although O-2A progenitor cells in E17 optic nerve prematurely stop dividing and differentiate into oligodendrocytes within 2 days in culture, when cultured on a monolayer of type 1 astrocytes, they continue to proliferate; moreover, the first cells differentiate into oligodendrocytes after 4 days in vitro, which is equivalent to the time that oligodendrocytes first appear in vivo. Our findings suggest that the timing of oligodendrocyte differentiation depends on an intrinsic clock in the O-2A progenitor cell that counts cell divisions that are driven by a growth factor (or factors) produced by type 1 astrocytes.