This invention provides populations of neural cells bearing markers of glialcells, such as oligodendrocytes and their precursors. The populations aregenerated by differentiating pluripotent stem cells such as human embryonicstem cells under conditions that promote enrichment of cells with the desiredphenotype or functional capability. Various combinations of differentiationfactors and mitogens can be used to produce cell populations bearing markersof oligodendrocyte precursor cells. Upon further differentiation form complexprocesses characteristic of mature oligodendrocytes. The cells are capable offorming myelin sheaths, and can be used therapeutically improve function ofthe central nervous system.