Remyelination failure plays an important role in the pathophysiology of multiple sclerosis, but the underlying cellular and molecular mechanisms remain poorly understood. We now report actively demyelinating lesions in patients with multiple sclerosis are associated with increased glial expression of fibroblast growth factor 9 (FGF9), which we demonstrate inhibits myelination and remyelination in vitro. This inhibitory activity is associated with the appearance of multi-branched 'pre-myelinating' MBP(+)/PLP(+) oligodendrocytes that interact with axons but fail to assemble myelin sheaths; an oligodendrocyte phenotype described previously in chronically demyelinated multiple sclerosis lesions. This inhibitory activity is not due to a direct effect of FGF9 on cells of the oligodendrocyte lineage but is mediated by factors secreted by astrocytes. Transcriptional profiling and functional validation studies demonstrate that these include effects dependent on increased expression of tissue inhibitor of metalloproteinase-sensitive proteases, enzymes more commonly associated with extracellular matrix remodelling. Further, we found that FGF9 induces expression of Ccl2 and Ccl7, two pro-inflammatory chemokines that contribute to recruitment of microglia and macrophages into multiple sclerosis lesions. These data indicate glial expression of FGF9 can initiate a complex astrocyte-dependent response that contributes to two distinct pathogenic pathways involved in the development of multiple sclerosis lesions. Namely, induction of a pro-inflammatory environment and failure of remyelination; a combination of effects predicted to exacerbate axonal injury and loss in patients.