AbstractOligodendrocyte precursors (OLPs) in the developing spinal cord are generated from the same part of the ventral neuroepithelium as motor neurons, by inductive processes that include a temporal switch from neuronal to glial cell fate. Recent studies have implicated Shh as a key signal in the generation of both OLPs and ventral neurons. In this study, we used Shh−/−, Gli3−/−, and Shh−/−;Gli3−/− mutants to address the role of Shh signaling during oligodendrocyte development. We find that, in the absence of Gli3, Shh signaling is dispensable for the generation and maintenance of OLPs. However, Shh is required for OLPs to emerge at the appropriate developmental stages and for subsequent differentiation of OLPs into mature oligodendrocytes. The initial delay and reduction in OLP generation in Shh−/−;Gli3−/− mutants are accompanied by extended neurogenesis and persistent expression of Neurogenin 2 in the Olig2 progenitor domain, suggesting that Shh signaling influences the timing of neuron–glia fate switching. Thus, our studies suggest that Shh signaling plays multiple roles during development of oligodendrocytes. Developmental Dynamics 234:489–496, 2005. © 2005 Wiley‐Liss, Inc.