Proper development of the CNS axon-glia unit requires bi-directional communication between axons and oligodendrocytes (OLs). We show that the signaling lipid phosphatidylinositol-3,5-bisphosphate [PI(3,5)P2] is required in neurons and in OLs for normal CNS myelination. In mice, mutations of Fig4, Pikfyve or Vac14, encoding key components of the PI(3,5)P2 biosynthetic complex, each lead to impaired OL maturation, severe CNS hypomyelination and delayed propagation of compound action potentials. Primary OLs deficient in Fig4 accumulate large LAMP1+ and Rab7+ vesicular structures and exhibit reduced membrane sheet expansion. PI(3,5)P2 deficiency leads to accumulation of myelin-associated glycoprotein (MAG) in LAMP1+ perinuclear vesicles that fail to migrate to the nascent myelin sheet. Live-cell imaging of OLs after genetic or pharmacological inhibition of PI(3,5)P2 synthesis revealed impaired trafficking of plasma membrane-derived MAG through the endolysosomal system in primary cells and brain tissue. Collectively, our studies identify PI(3,5)P2 as a key regulator of myelin membrane trafficking and myelinogenesis.