The SRY-box (Sox) transcription factors regulate oligodendrocyte differentiation, but their signaling targets are largely unknown. We have identified a major signal transduction pathway regulated by Sox containing gene 17 (Sox17) in the oligodendrocyte lineage. Microarray analysis in oligodendrocyte progenitor cells (OPCs) after Sox17 attenuation revealed upregulated genes associated with cell cycle control and activation of the Wingless and integration site (Wnt)/β-catenin pathway. Sox17 knockdown also increases the levels of cyclin D1, Axin2, and activated β-catenin. In OPCs, the expression pattern of Sox17, cyclin D1, and secreted Frizzled-related protein-1 in the presence of platelet-derived growth factor (PDGF) was coordinately accelerated by addition of thyroid hormone, indicating differentiation-induced regulation of Sox17 targets. In developing white matter, decreased total β-catenin, activated β-catenin, and cyclin D1 levels coincided with the peak of Sox17 expression, and immunoprecipitates showed a developmentally regulated interaction among Sox17, T-cell transcription factor 4, and β-catenin proteins. In OPCs, PDGF stimulated phosphorylation of glycogen synthase 3β and the Wnt coreceptor LRP6, and enhanced β-catenin-dependent gene expression. Sox17 overexpression inhibited PDGF-induced TOPFLASH and cyclin D1 promoter activity, and decreased endogenous cyclin D1, activated β-catenin, as well as total β-catenin levels. Recombinant Sox17 prevented Wnt3a from repressing myelin protein expression, and inhibition of Sox17-mediated proteasomal degradation of β-catenin blocked myelin protein induction. These results indicate that Sox17 suppresses cyclin D1 expression and cell proliferation by directly antagonizing β-catenin, whose activity in OPCs is stimulated not only by Wnt3a, but also by PDGF. Our identification of downstream targets of Sox17 thus defines signaling pathways and molecular mechanisms in OPCs that are regulated by Sox17 during cell cycle exit and the onset of differentiation in oligodendrocyte development.