ABSTRACT Clostridium perfringens epsilon toxin (ε-toxin) is responsible for a devastating multifocal central nervous system (CNS) white matter disease in ruminant animals. The mechanism by which ε-toxin causes white matter damage is poorly understood. In this study, we sought to determine the molecular and cellular mechanisms by which ε-toxin causes pathological changes to white matter. In primary CNS cultures, ε-toxin binds to and kills oligodendrocytes but not astrocytes, microglia, or neurons. In cerebellar organotypic culture, ε-toxin induces demyelination, which occurs in a time- and dose-dependent manner, while preserving neurons, astrocytes, and microglia. ε-Toxin specificity for oligodendrocytes was confirmed using enriched glial culture. Sensitivity to ε-toxin is developmentally regulated, as only mature oligodendrocytes are susceptible to ε-toxin; oligodendrocyte progenitor cells are not. ε-Toxin sensitivity is also dependent on oligodendrocyte expression of the proteolipid myelin and lymphocyte protein (MAL), as MAL-deficient oligodendrocytes are insensitive to ε-toxin. In addition, ε-toxin binding to white matter follows the spatial and temporal pattern of MAL expression. A neutralizing antibody against ε-toxin inhibits oligodendrocyte death and demyelination. This study provides several novel insights into the action of ε-toxin in the CNS. (i) ε-Toxin causes selective oligodendrocyte death while preserving all other neural elements. (ii) ε-Toxin-mediated oligodendrocyte death is a cell autonomous effect. (iii) The effects of ε-toxin on the oligodendrocyte lineage are restricted to mature oligodendrocytes. (iv) Expression of the developmentally regulated proteolipid MAL is required for the cytotoxic effects. (v) The cytotoxic effects of ε-toxin can be abrogated by an ε-toxin neutralizing antibody. IMPORTANCE Our intestinal tract is host to trillions of microorganisms that play an essential role in health and homeostasis. Disruption of this symbiotic relationship has been implicated in influencing or causing disease in distant organ systems such as the brain. Epsilon toxin (ε-toxin)-carrying Clostridium perfringens strains are responsible for a devastating white matter disease in ruminant animals that shares similar features with human multiple sclerosis. In this report, we define the mechanism by which ε-toxin causes white matter disease. We find that ε-toxin specifically targets the myelin-forming cells of the central nervous system (CNS), oligodendrocytes, leading to cell death. The selectivity of ε-toxin for oligodendrocytes is remarkable, as other cells of the CNS are unaffected. Importantly, ε-toxin-induced oligodendrocyte death results in demyelination and is dependent on expression of myelin and lymphocyte protein (MAL). These results help complete the mechanistic pathway from bacteria to brain by explaining the specific cellular target of ε-toxin within the CNS.