As part of our attempts to understand principles that underly organism development, we have been studying the development of the rat optic nerve. This simple tissue is composed of three glial cell types derived from two distinct cellular lineages. Type-1 astrocytes appear to be derived from a monopotential neuroepithelial precursor, whereas type-2 astrocytes and oligodendrocytes are derived from a common oligodendrocyte-type-2 astrocyte (O-2A) progenitor cell. Type-1 astrocytes modulate division and differentiation of O-2A progenitor cells through secretion of plateletderived growth factor, and can themselves be stimulated to divide by peptide mitogens and through stimulation of neurotransmitter receptors. In vitro analysis indicates that many dividing O-2A progenitors derived from optic nerves of perinatal rats differentiate symmetrically and clonally to give rise to oligodendrocytes, or can be induced to differentiate into type-2 astrocytes. O-2A<latex>$^{\text{perinatal}}$</latex> progenitors can also differentiate to form a further O-2A lineage cell, the O-2A<latex>$^{\text{adult}}$</latex> progenitor, which has properties specialized for the physiological requirements of the adult nervous system. In particular, O-2A<latex>$^{\text{adult}}$</latex> progenitors have many of the features of stem cells, in that they divide slowly and asymmetrically and appear to have the capacity for extended self-renewal. The apparent derivation of a slowly and asymmetrically dividing cell, with properties appropriate for homeostatic maintenance of existing populations in the mature animal, from a rapidly dividing cell with properties suitable for the rapid population and myelination of central nervous system (CNS) axon tracts during early development, offers novel and unexpected insights into the possible origin of self-renewing stem cells and also into the role that generation of stem cells may play in helping to terminate the explosive growth of embryogenesis. Moreover, the properties of O-2A<latex>$^{\text{adult}}$</latex> progenitor cells are consistent with, and may explain, the failure of successful myelin repair in conditions such as multiple sclerosis, and thus seem to provide a cellular biological basis for understanding one of the key features of an important human disease.

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