This invention provides populations of neural cells bearing markers of glial cells, such as oligodendrocytes and their precursors. The populations are generated by differentiating pluripotent stem cells such as human embryonic stem cells under conditions that promote enrichment of cells with the desired phenotype or functional capability. Various combinations of differentiation factors and mitogens can be used to produce cell populations that are over 95% homogeneous in morphological appearance, and the expression of oligodendrocyte markers such as GalC. The cells are capable of forming myelin sheaths, and can be used therapeutically improve function of the central nervous system.