All the neurons and glial cells of the central nervous system are generated from the neuroepithelial cells in the walls of the embryonic neural tube, the 'embryonic neural stem cells'. The stem cells seem to be equivalent to the so-called 'radial glial cells', which for many years had been regarded as a specialized type of glial cell. These radial cells generate different classes of neurons in a position-dependent manner. They then switch to producing glial cells (oligodendrocytes and astrocytes). It is not known what drives the neuron-glial switch, although downregulation of pro-neural basic helix-loop-helix transcription factors is one important step. This drives the stem cells from a neurogenic towards a gliogenic mode. The stem cells then choose between developing as oligodendrocytes or astrocytes, of which there might be intrinsically different subclasses. This review focuses on the different extracellular signals and intracellular responses that influence glial generation and the choice between oligodendrocyte and astrocyte fates.