We have investigated the gliogenic potential of cells isolated from a recently described GFP-transgenic rat [Inoue, H., Ohsawa, I., Murakami, T., Kimura, A., Hakamata, Y., Sato, Y., Kaneko, T., Takahashi, M., Okada, T., Ozawa, K., Francis, J., Leone, P., Kobayashi, E., 2005. Development of new inbred transgenic strains of rats with LacZ or GFP. Biochem Biophys Res Commun 329 288-295.] for application to oligodendrocyte replacement in models of white matter insult and disease. These transgenic rats present native GFP fluorescence in oligodendrocytes of the CNS, with no detectable fluorescence in astrocytes or mature neurons. By targeting a highly gliogenic period of postnatal development, we show that sphere-forming cultures of proliferating cells generated from the GFP-transgenic brain give rise to significant numbers of differentiated oligodendrocytes in vitro. Postnatal source tissue was significantly more gliogenic than embryonic source tissue, with greater than 50% of postnatally derived cells differentiating into GFP-positive oligodendrocytes. Differentiated oligodendrocytes exhibited an increased intensity of GFP fluorescence concomitant with the acquisition of mature oligodendrocyte-specific markers in both isolated cultures and in co-culture with primary neurons. Transplantation of postnatally derived GFP-positive sphere-forming cells into ethidium bromide lesioned Kyoto-Wistar rats resulted in the engraftment and survival of GFP-positive oligodendrocytes for at least 6 weeks in the host white matter and cerebral cortex. Our results show that sphere-forming cultures of cells isolated from the early postnatal GFP-Lewis rat brain are a useful tool for oligodendrocyte replacement studies.