Regeneration of myelin is mediated by oligodendrocyte progenitor cells—an abundant stem cell population in the central nervous system (CNS) and the principal source of new myelinating oligodendrocytes. Loss of myelin-producing oligodendrocytes in the CNS underlies a number of neurological diseases, including multiple sclerosis and diverse genetic diseases^{, –}. High-throughput chemical screening approaches have been used to identify small molecules that stimulate the formation of oligodendrocytes from oligodendrocyte progenitor cells and functionally enhance remyelination in vivo^{, , , , , –}. Here we show that a wide range of these pro-myelinating small molecules function not through their canonical targets but by directly inhibiting CYP51, TM7SF2, or EBP, a narrow range of enzymes within the cholesterol biosynthesis pathway. Subsequent accumulation of the 8,9-unsaturated sterol substrates of these enzymes is a key mechanistic node that promotes oligodendrocyte formation, as 8,9-unsaturated sterols are effective when supplied to oligodendrocyte progenitor cells in purified form whereas analogous sterols that lack this structural feature have no effect. Collectively, our results define a unifying sterol-based mechanism of action for most known small-molecule enhancers of oligodendrocyte formation and highlight specific targets to propel the development of optimal remyelinating therapeutics.