During development, newborn interneurons migrate throughout the embryonic brain. Here, we provide evidence that these interneurons act in a paracrine fashion to regulate developmental oligodendrocyte formation. Specifically, we show that medial ganglionic eminence (MGE) interneurons secrete factors that promote genesis of oligodendrocytes from glially biased cortical precursors in culture. Moreover, when MGE interneurons are genetically ablated in vivo prior to their migration, this causes a deficit in cortical oligodendrogenesis. Modeling of the interneuron-precursor paracrine interaction using transcriptome data identifies the cytokine fractalkine as responsible for the pro-oligodendrocyte effect in culture. This paracrine interaction is important in vivo, since knockdown of the fractalkine receptor CX3CR1 in embryonic cortical precursors, or constitutive knockout of CX3CR1, causes decreased numbers of oligodendrocyte progenitor cells (OPCs) and oligodendrocytes in the postnatal cortex. Thus, in addition to their role in regulating neuronal excitability, interneurons act in a paracrine fashion to promote the developmental genesis of oligodendrocytes.