Oligodendrocyte formation and myelination in the optic nerve of rats treated with cortisol on postnatal days 7 and 18 were investigated at 21 and 60 days by autoradiographic and morphometric methods. At 21 days, the amount of myelin in the optic nerve of treated rats was reduced by 42%. This reduction was accompanied by a 39% decrease in the number of myelinated axons. In addition, the myelin/axon area ratio was reduced 22% for those axons which were myelinated. At 60 days, the amount of myelin, the number of axons myelinated, the average axonal size, and the average amount of myelin per axon had completely recovered to normal values. Tritiated thymidine-labeling experiments showed that the genesis of oligodendrocytes was enhanced following the cessation of treatment. Since the number of oligodendrocytes in the optic nerve of treated rats was normal at 60 days, it is suggested that the retarding effect of cortisol on myelination in the optic nerve may be mediated, at least in part, by inhibited formation of oligodendrocytes during treatment.