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Deficient myelination, the spiral wrapping of highly specialized membrane around axons, causes severe neurological disorders. Maturation of oligodendrocyte progenitor cells (OPC) to myelinating oligodendrocytes (OL), the sole providers of central nervous system (CNS) myelin, is tightly regulated and involves extensive morphological changes. Here, we present evidence that autophagy, the targeted isolation of cytoplasm and organelles by the double-membrane autophagosome for lysosomal degradation, is essential for OPC/OL differentiation, survival, and proper myelin development. A marked increase in autophagic activity coincides with OL differentiation, with OL processes having the greatest increase in autophagic flux. Multiple lines of evidence indicate that autophagosomes form in developing myelin sheathes before trafficking from myelin to the OL soma. Mice with conditional OPC/OL-specific deletion of the essential autophagy gene Atg5 beginning on postnatal Day 5 develop a rapid tremor and die around postnatal Day 12. Further analysis revealed apoptotic death of OPCs, reduced differentiation, and reduced myelination. Surviving Atg5-/- OLs failed to produce proper myelin structure. In vitro, pharmacological inhibition of autophagy in OPC/dorsal root ganglion (DRG) co-cultures blocked myelination, producing OLs surrounded by many short processes. Conversely, autophagy stimulation enhanced myelination. These results implicate autophagy as a key regulator of OPC survival, maturation, and proper myelination. Autophagy may provide an attractive target to promote both OL survival and subsequent myelin repair after injury.