The most common cause of Pelizaeus‐Merzbacher (PMD) is due to duplication of the PLP1 gene but it is unclear how increased gene dosage affects PLP turnover and causes dysmyelination. We have studied the dynamics of PLP/DM20 in a transgenic mouse model of PMD with increased gene dosage of the proteolipid protein gene (Plp1). The turnover of PLP/DM20 were investigated using an ex‐vivo brain slice system and cultured oligodendrocytes. Homozygous mice have reduced PLP translation, markedly enhanced PLP degradation, and markedly reduced incorporation of PLP into myelin. Proteasome inhibition (MG132) prevented the enhanced degradation. Numerous autophagic vesicles are present in homozygous transgenic mice that may influence protein dynamics. Surprisingly, promoting autophagy with rapamycin decreases the degradation of nascent PLP suggesting autophagic vacuoles serve as a cellular storage compartment. We suggest that there are multiple subcellular fates of PLP/DM20 when overexpressed: the vast majority being degraded by the proteasome, a proportion sequestered into autophagic vacuoles, probably fused with endolysosomes, and only a small proportion entering the myelin sheath, where its association with lipid rafts is perturbed. Transgenic oligodendrocytes have fewer membrane sheets and this phenotype is improved with siRNA‐mediated knockdown of PLP expression that promotes the formation of MBP+ myelin‐like sheets. This finding suggests that RNAi technology is in principle applicable to improve CNS myelination when compromised by PLP/DM20 overexpression. © 2010 Wiley‐Liss, Inc.