Abstract A major issue in the potential application of neural stem cell (NSC)-based cell replacement therapy for demyelinating diseases is the question of the survival, functional behavior, and stability of implanted NSC-derived oligodendrocyte precursor cells (OPCs) over an extended period. To address this issue, we employed bioluminescence imaging (BLI) as a noninvasive longitudinal in vivo monitoring technique and followed the fate of NSCs isolated from luciferase–green fluorescent protein–actin transgenic mice after stereotactic implantation in the demyelinated corpus callosum of cuprizone-fed mice. We compared normal NSCs with NSCs that were primed to become OPCs by the induction of Olig2 overexpression (Olig2-NSCs). BLI, validated by immunohistochemistry, revealed that, after a steep cell loss after implantation during the first 3 weeks, approximately 10% of the Olig2-NSCs stably survived for 2 months after implantation, in contrast to <1% of the normal NSCs. Immunohistochemistry, at the light and electron microscopic levels, revealed that the majority of the surviving Olig2-NSCs had differentiated into an oligodendrocytic cell lineage and contributed to remyelination of axons in the corpus callosum. The number of axons remyelinated by the implanted cells, however, was a small fraction of the total number of axons remyelinated by endogenous oligodendrocytes. Apparently, most of the implanted NSCs did not survive the transition into an inappropriate non-neurogenic niche, compressed by surrounding host tissue, in hostile, inflammatory conditions created by activated microglia. Only the ones that managed to differentiate rapidly into a mature neural cell type and become functionally integrated survived. Disclosure of potential conflicts of interest is found at the end of this article.