Neurosphere-forming cell (NSFC) lines have been derived from cultures of adult olfactory neuroepithelium obtained from patients and cadavers. These progenitors remain undifferentiated when maintained in minimal essential medium with 10% fetal bovine serum, but have the potential to differentiate along glial or neuronal lineages. However, few of these cells ever express mature neuronal or glial markers in defined medium. To evaluate the potential of NSFCs to form oligodendrocytes, two transcription factors, Olig2 and Nkx2.2, were introduced into NSFCs to determine whether their expression is sufficient for oligodendrocyte differentiation, as has been shown in the embryonic avian and murine central nervous systems in vivo. NSFCs transfected with Olig2 or Nkx2.2 alone exhibited no phenotypic lineage restriction. In contrast, simultaneous transfection of Olig2 and Nkx2.2 cDNA produced characteristic oligodendrocyte morphology and antigenicity, including myelin basic protein (MBP). Furthermore, a population of Olig2-expressing NSFCs also expressed Sox10. Cotransfection of NSFCs with Nkx2.2 and Sox10, but not Olig2 and Sox10, produced a MBP+ oligodendrocytic phenotype. Coculture of NSFCs transfected with Olig2 and Nkx2.2 or Nkx2.2 and Sox10 with purified sensory neurons, demonstrated frequent contacts between NSFC processes and axons, including the early stages of ensheathment. These studies demonstrate transcription factors governing early development of chick and mouse oligodendrocyte formation, also apply to human progenitors isolated from adult olfactory neuroepithelium. Our long-term goal is to develop cell populations for future studies used to determine the therapeutic utility of these olfactory-derived NSFCs for autologous transplantation into donors with central nervous system trauma or neurodegenerative diseases.