Glucocorticoids are commonly used in treating diseases with white matter lesions, including demyelinating diseases and spinal cord injury (SCI). However, glucocorticoids are ineffective in gray matter injuries, such as head injury and stroke. The differential glucocorticoid effects in white and gray matter injuries are unclear. We report here a novel mechanism of methylprednisolone (MP), a synthetic glucocorticoid widely used for treating multiple sclerosis and SCI, in protecting oligodendrocytes (OLGs) against AMPA-induced excitotoxicity, which has been implicated in the white matter injuries and diseases. The cytoprotective action of MP in OLGs is causally related to its upregulation of a neuroprotective cytokine erythropoietin (Epo). MP transactivation of Epo expression involves dual transcription factors: glucocorticoid receptor (GR) and hypoxia-inducible factor-1alpha (HIF-1alpha). Coimmunoprecipitation, chromatin immunoprecipitation analysis, yeast two-hybrid analysis, and structure modeling of three-dimensional protein-protein interactions confirm that MP induces interaction between GR DNA binding domain and HIF-1alpha PAS domain, with subsequent recruitment of HIF-1beta to transactivate Epo expression in OLGs. In contrast, MP activates GR but does not induce GR-HIF-1alpha interaction, HIF-1alpha binding to Epo enhancer/promoter, or Epo expression in cultured cortical neurons. The OLG-specific GR-HIF-1alpha transactivation of Epo provides novel insights into the development of more effective therapies for diseases affecting the white matter.