Disrupted-in-schizophrenia 1 (DISC1) is a gene disrupted by a translocation, t(1;11) (q42.1;q14.3), that segregates with major psychiatric disorders, including schizophrenia, recurrent major depression and bipolar affective disorder, in a Scottish family. Here we report that mammalian DISC1 endogenously expressed in oligodendroglial lineage cells negatively regulates differentiation of oligodendrocyte precursor cells into oligodendrocytes. DISC1 expression was detected in oligodendrocytes of the mouse corpus callosum at P14 and P70. DISC1 mRNA was expressed in primary cultured rat cortical oligodendrocyte precursor cells and decreased when oligodendrocyte precursor cells were induced to differentiate by PDGF deprivation. Immunocytochemical analysis showed that overexpressed DISC1 was localized in the cell bodies and processes of oligodendrocyte precursor cells and oligodendrocytes. We show that expression of the myelin related markers, CNPase and MBP, as well as the number of cells with a matured oligodendrocyte morphology, were decreased following full length DISC1 overexpression. Conversely, both expression of CNPase and the number of oligodendrocytes with a mature morphology were increased following knockdown of endogenous DISC1 by RNA interference. Overexpression of a truncated form of DISC1 also resulted in an increase in expression of myelin related proteins and the number of mature oligodendrocytes, potentially acting via a dominant negative mechanism. We also identified involvement of Sox10 and Nkx2.2 in the DISC1 regulatory pathway of oligodendrocyte differentiation, both well-known transcription factors involved in the regulation of myelin genes.