Oligodendrocytes are vulnerable to CNS injury and disease. Because oligodendrocytes myelinate CNS axons, their death leads to demyelination and impaired axon conductance, which in turn contribute to neurologic deficits. Replacing oligodendrocytes requires proliferation and differentiation of endogenous NG2+ progenitor cells, a process that can be potently influenced by activated macrophages, which are present in most CNS pathologies. To examine the relationship between oligodendrocyte generation and macrophage activation in vivo, we compared the extent of oligodendrocyte loss and NG2 cell proliferation and differentiation after intraspinal microinjection of lipopolysaccharide (a Toll-like receptor-4 agonist) or zymosan (Toll-like receptor-2 agonist) in rats. Controls included injecting vehicle (sterile PBS; negative control) or lysolecithin (positive control for NG2 cell proliferation and oligodendrocyte differentiation). By 14 days postinjection, lipopolysaccharide injection sites displayed a sigficant rise in NG2 cell proliferation and oligodendrocyte differentiation, which exceeded that in vehicle and lysolecithin injections. Additionally, upregulated ciliary neurotrophic factor expression was present in lipopolysaccharide lesions. In contrast, zymosan-activated macrophages produced complete oligodendrocyte loss without stimulating NG2 cell proliferation, oligodendrocyte replacement, or ciliary neurotrophic factor expression. Zymosan also evoked a delayed lesion expansion and primary demyelination of intact myelinated axons around the lesions. These results clearly delineate the dichotomous potential of macrophage activation for influencing NG2 cell proliferation and oligodendrocyte differentiation. Because endogenous Toll-like receptor ligands are often present in injured CNS tissue, these results shed light on possible mechanisms that restrict oligodendrocyte replacement to specific domains of CNS trauma or disease sites.