Steroid hormones are important for the normal development of brain. The addition of hydrocortisone to oligodendroglia in culture increases the level of mRNA for proteolipid protein, increases the synthesis of cerebrosides, and provides an induction of activities for the ketone body metabolizing enzymes. While proteolipid protein and cerebrosides are major components of myelin membranes, ketone bodies serve as precursors for lipid synthesis during development. Thus, hydrocortisone is important during the differentiation of oligodendroglia and during initial myelin production.