An essential feature of vertebrate neural development is ensheathment of axons with myelin, an insulating membrane formed by oligodendrocytes. Not all axons are myelinated, but mechanisms directing myelination of specific axons are unknown. Using zebrafish, we found that activity-dependent secretion stabilized myelin sheath formation on select axons. When VAMP2-dependent exocytosis was silenced in single axons, oligodendrocytes preferentially ensheathed neighboring axons. Nascent sheaths formed on silenced axons were shorter in length, but when activity of neighboring axons was also suppressed, inhibition of sheath growth was relieved. Using in vivo time-lapse microscopy, we found that only 25% of oligodendrocyte processes that initiated axon wrapping were stabilized during normal development and that initiation did not require activity. Instead, oligodendrocyte processes wrapping silenced axons retracted more frequently. We propose that axon selection for myelination results from excessive and indiscriminate initiation of wrapping followed by refinement that is biased by activity-dependent secretion from axons.