In this study we used organotypic cerebellar slice cultures from neonatal rat pups in combination with scanning laser confocal microscopy to monitor the cellular events associated with the formation of central nervous system (CNS) myelin. Our images showed the migration of neural precursor cells, differentiation of these cells into glial cells and neurons, and the subsequent myelination of neuronal axons. Both light and confocal microscopy provided valuable information on morphological changes associated with neural differentiation and the formation of CNS tissue. The combined use of confocal microscopy with cerebellar slice cultures holds promise for evaluating the effects of agents that promote myelination. This in turn will help with understanding of demyelination and myelin repair in disorders such as multiple sclerosis and spinal cord injury.