The CNS is thought to develop from self-renewing stem cells that generate neurons, astrocytes, and oligodendrocytes. Other data, however, have suggested that astrocytes and oligodendrocytes are generated from separate progenitor populations. To reconcile these observations, we have prospectively isolated progenitors that do or do not express Olig2, an oligodendrocyte bHLH determination factor. Both Olig2(-) and Olig2(+) progenitors can behave as tripotential CNS stem cells (CNS-SCs) in vitro. Growth in FGF-2 causes induction of Olig2 in the former population, permitting oligodendrocyte differentiation; extinction of Olig2 in the latter cells permits astrocyte differentiation. The induction of Olig2 by FGF-2 is mediated, in part, via endogenous Sonic Hedgehog. These data indicate that clonogenic competence to generate neurons, astrocytes, and oligodendrocytes reflects a deregulation of dorsoventral patterning during expansion in vitro, raising the question of whether such trifatent cells actually exist in vivo.