Selection of the correct targets for myelination and regulation of myelin sheath growth are essential for central nervous system (CNS) formation and function. Through a genetic screen in zebrafish and complementary analyses in mice, we find that loss of oligodendrocyte Neurofascin leads to mistargeting of myelin to cell bodies, without affecting targeting to axons. In addition, loss of Neurofascin reduces CNS myelination by impairing myelin sheath growth. Time-lapse imaging reveals that the distinct myelinating processes of individual oligodendrocytes can engage in target selection and sheath growth at the same time and that Neurofascin concomitantly regulates targeting and growth. Disruption to Caspr, the neuronal binding partner of oligodendrocyte Neurofascin, also impairs myelin sheath growth, likely reflecting its association in an adhesion complex at the axon-glial interface with Neurofascin. Caspr does not, however, affect myelin targeting, further indicating that Neurofascin independently regulates distinct aspects of CNS myelination by individual oligodendrocytes in vivo.