Demyelination occurs in multiple inherited mitochondrial diseases. We studied which genes were induced as a consequence of differentiation in rodent and human oligodendroglia. Cholesterol, myelin and mitochondrial genes were significantly increased with oligodendroglial differentiation. Mitochondrial DNA content per cell and acetyl CoA-related transcripts increased significantly; thus, the large buildup of cholesterol necessary for myelination appears to require mitochondrial production of acetyl-CoA. Oligodendroglia were treated with low doses of the mitochondrial inhibitor rotenone to test the dependence of differentiation on mitochondrial function. Undifferentiated cells were resistant to rotenone, whereas differentiating cells were much more sensitive. Very low doses of rotenone that did not affect viability or ATP synthesis still inhibited differentiation, as measured by reduced levels of the myelin transcripts 2′,3′-Cyclic Nucleotide-3′-Phosphodiesterase and Myelin Basic Protein. Thus, mitochondrial transcripts and mtDNA are amplified during oligodendroglial differentiation, and differentiating oligodendroglia are especially sensitive to mitochondrial inhibition, suggesting mechanisms for demyelination observed in mitochondrial disease.