The use of in vitro oligodendrocyte differentiation for transplantation of stem cells to treat demyelinating diseases is an important consideration. In this study, we investigated the effects of serum on glia and oligodendrocyte differentiation from human mesenchymal stem cells (KP-hMSCs). We found that serum deprivation resulted in a reversible downregulation of glial- and oligodendrocyte-specific markers. Serum stimulated expression of oligodendrocyte markers, such as galactocerebroside, as well as Notch1 and JAK1 transcripts. Inhibition of Notch1 activation by the Notch inhibitor, MG132, led to enhanced expression of a serum-stimulated oligodendrocyte marker. This marker was undetectable in serum-deprived KP-hMSCs treated with MG132, suggesting that inhibition of Notch1 function is additive to serum-stimulated oligodendrocyte differentiation. Furthermore, a dominant-negative mutant RBP-J protein also inhibited Notch1 function and led to upregulation of oligodendrocyte-specific markers. Our results demonstrate that serum-stimulated oligodendrocyte differentiation is enhanced by the inhibition of Notch1-associated functions.