Tissue inhibitor of metalloproteinase-1 (TIMP-1) is an extracellular protein and endogenous regulator of matrix metalloproteinases (MMPs) secreted by astrocytes in response to CNS myelin injury. We have previously reported that adult TIMP-1 knock-out (KO) mice exhibit poor myelin repair following demyelinating injury. This observation led us to hypothesize a role for TIMP-1 in oligodendrogenesis and CNS myelination. Herein, we demonstrate that compact myelin formation is significantly delayed in TIMP-1 KO mice, a situation that coincided with dramatically reduced numbers of white matter astrocytes in the developing CNS. Analysis of differentiation in CNS progenitor cells (neurosphere) cultures from TIMP-1 KO mice revealed a specific deficit of NG2(+) oligodendrocyte progenitor cells. Application of recombinant murine TIMP-1 (rmTIMP-1) to TIMP-1 KO neurosphere cultures evoked a dose-dependent increase in NG2(+) cell numbers, while treatment with GM6001, a potent broad-spectrum MMP inhibitor did not. Similarly, administration of rmTIMP-1 to A2B5(+) immunopanned oligodendrocyte progenitors significantly increased the number of differentiated O1(+) oligodendrocytes, while antisera to TIMP-1 reduced oligodendrocyte numbers. We also determined that A2B5(+) oligodendrocyte progenitors grown in conditioned media derived from TIMP-1 KO primary glial cultures resulted in reduced differentiation of mature O1(+) oligodendrocytes. Finally, we report that addition of rmTIMP-1 to primary glial cultures resulted in a dose-dependent proliferative response of astrocytes. Together, these findings describe a previously uncharacterized role for TIMP-1 in the regulation of oligodendrocytes and astrocytes during development and provide a novel function for TIMP-1 on myelination in the developing CNS.