Postnatal oligodendrocyte progenitor cells (OPC) self-renew, generate mature oligodendrocytes, and are a cellular origin of oligodendrogliomas. We show that the proteoglycan NG2 segregates asymmetrically during mitosis to generate OPC cells of distinct fate. NG2 is required for asymmetric segregation of EGFR to the NG2⁺ progeny, which consequently activates EGFR and undergoes EGF-dependent proliferation and self-renewal. In contrast, the NG2⁻ progeny differentiates. In a mouse model, decreased NG2 asymmetry coincides with premalignant, abnormal self-renewal rather than differentiation and with tumor-initiating potential. Asymmetric division of human NG2⁺ cells is prevalent in non-neoplastic tissue but is decreased in oligodendrogliomas. Regulators of asymmetric cell division are misexpressed in low-grade oligodendrogliomas. Our results identify loss of asymmetric division associated with the neoplastic transformation of OPC.