Multiple sclerosis (MS) is a chronic disabling disease of the central nervous system (CNS), in which destruction of myelin sheaths leads to disturbed axonal conduction. Available MS therapies modulate the immune response, but are unable to prevent neurological decline. Therefore, great efforts are made to develop therapies that limit demyelination and axonal degeneration. Oncostatin M (OSM), a member of the interleukin (IL)-6 cytokine family, is produced in demyelinating lesions of MS patients and stimulates neuronal survival. In this study, we reveal that the OSM receptor (OSMR) was robustly upregulated on microglia/macrophages and astrocytes in the cuprizone-induced demyelination model. While OSMR deficiency led to aggravated demyelination, CNS-targeted OSM treatment largely prevented demyelination. OSM treatment increased IL-4 expression and induced polarization of myeloid cells towards an anti-inflammatory M2 phenotype in vivo. This study reveals a previously uncharacterized and protective role for OSM during demyelination, and indicates that OSM is a promising therapeutic candidate to limit CNS damage in demyelinating diseases including MS. GLIA 2015;63:1729-1737.