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Formation of myelin, the electrical insulation on axons produced by oligodendrocytes, is controlled by complex cell-cell signaling that regulates oligodendrocyte development and myelin formation on appropriate axons. If electrical activity could stimulate myelin induction, then neurodevelopment and the speed of information transmission through circuits could be modified by neural activity. We find that release of glutamate from synaptic vesicles along axons of mouse dorsal root ganglion neurons in culture promotes myelin induction by stimulating formation of cholesterol-rich signaling domains between oligodendrocytes and axons, and increasing local synthesis of the major protein in the myelin sheath, myelin basic protein, through Fyn kinase-dependent signaling. This axon-oligodendrocyte signaling would promote myelination of electrically active axons to regulate neural development and function according to environmental experience.