Research on myelination has focused on identifying molecules capable of inducing oligodendrocyte (OL) differentiation in an effort to develop strategies that promote functional myelin regeneration in demyelinating disorders. Here, we show that transforming growth factor β (TGFβ) signaling is crucial for allowing oligodendrocyte progenitor (OP) cell cycle withdrawal, and therefore, for oligodendrogenesis and postnatal CNS myelination. Enhanced oligodendrogenesis and subcortical white matter (SCWM) myelination was detected after TGFβ gain of function, while TGFβ receptor II (TGFβ-RII) deletion in OPs prevents their development into mature myelinating OLs, leading to SCWM hypomyelination in mice. TGFβ signaling modulates OP cell cycle withdrawal and differentiation through the transcriptional modulation of c-myc and p21 gene expression, mediated by the interaction of SMAD3/4 with Sp1 and FoxO1 transcription factors. Our study is the first to demonstrate an autonomous and crucial role of TGFβ signaling in OL development and CNS myelination, and may provide new avenues in the treatment of demyelinating diseases.