The differentiation of and myelination by oligodendrocytes (OLs) are exquisitely regulated by a series of intrinsic and extrinsic mechanisms. As each OL can make differing numbers of myelin segments with variable lengths along similar axon tracts, myelination can be viewed as a graded process shaped by inhibitory/inductive cues during development. Myelination by OLs is a prime example of an adaptive process determined by the microenvironment and architecture of the central nervous system (CNS). in this review, we discuss how myelin formation by OLs may be controlled by the heterogeneous microenvironment of the CNS. Then we address recent findings demonstrating that neighboring OLs may compete for available axon space, and highlight our current understanding of myelin-based inhibitors of axonal regeneration that are potentially responsible for the reciprocal dialogue between OLs and determine the numbers and lengths of myelin internodes. Understanding the mechanisms that control the spatiotemporal regulation of myelinogenic potential during development may provide valuable insight into therapeutic strategies for promoting remyelination in an inhibitory microenvironment.