Oligodendrocytes and the myelin they produce are a remarkable vertebrate specialization that enables rapid and efficient nerve conduction within the central nervous system. The generation of myelin during development involves a finely-tuned pathway of oligodendrocyte precursor specification, proliferation and migration followed by differentiation and the subsequent myelination of appropriate axons. In this review we summarize the molecular mechanisms known to regulate each of these processes, including the extracellular ligands that promote or inhibit development of the oligodendrocyte lineage, the intracellular pathways they signal through and the key transcription factors that mediate their effects. Many of these regulatory mechanisms have recurring roles in regulating several transitions during oligodendrocyte development, highlighting their importance. It is also highly likely that many of these developmental mechanisms will also be involved in myelin repair in human neurological disease.