Myelin is crucial for survival of neurons and maintenance of neural network function. Demyelinating disorders are debilitating and are often associated with failure of resident oligodendrocyte precursor cells (OPCs) to differentiate into mature, myelinating oligodendrocytes. Derivation of OPCs from a safe source that evades ethical issues offers a solution to remyelination therapy. We therefore hypothesized that neural progenitor cells harboured at a pre-commitment stage among stromal cells of the adult bone marrow (BMSCs) can be directed to differentiate along the oligodendroglial lineage. We started with adherent cultures of adult rat BMSCs >90% of which were CD90- , CD73- and STRO-1-positive (stromal cell markers) but were CD45-negative (haematopoietic cell marker) and 10% nestin-positive. Tranfer to non-adherent culture fostered expansion of the nestin-positive neural progenitors (NPs) in sphere formation at the expense of stromal cells. The BM-NPs were maintained in adherent culture supplemented with glia-inducing factors, beta-Heregulin, basic fibroblast growth factor and platelet-derived growth factor-AA. Within two weeks, cells positive for OPC markers – NG2, Olig2, PDGFRa and Sox10, were detectable. These cells could be expanded in culture for more than 3 months with no observable decline in marker expression. Co-culture with dorsal root ganglion neurons induced maturation of the BM-OPCs into myelinating oligodendrocytes. We further transplanted BM-OPCs into the retina of adult rats and demonstrated that by 8 weeks, some of the BM-OPC extended, myelin basic protein-positive processes along the otherwise unmyelinated retinal axons. The results not only suppport our hypothesis, but also provide pointers to the adult bone marrow as a safe and accessible source for the derivation of OPCs towards transplantation therapy in demyelinating disorders. [HKU RGC GRF 777810M; HKU S.K. Yee Medical Foundation Grants]