Productive infection of oligodendrocytes, which are responsible for the formation of myelin sheath in the central nervous system, with the human neurotropic virus JC virus (JCV) causes the fatal demyelinating disease progressive multifocal leukoencephalopathy (PML). In addition to encoding T antigen and the capsid proteins, which are produced at the early and late phases of the infection cycle, respectively, JCV encodes a small regulatory protein named agnoprotein that is important for successful completion of the virus life cycle. Here we used bipotential CG-4 cells to examine the impact of agnoprotein on oligodendrocyte differentiation and survival in the absence of JCV lytic infection. We demonstrate that the expression of agnoprotein delayed the formation of complex outgrowth networks of the cells during oligodendrocyte differentiation. These alterations were accompanied by high levels of DNA damage, induction of proapoptotic proteins, and suppression of prosurvival signaling. Accordingly, apoptosis was significantly increased upon the induction of CG-4 cells toward differentiation in cells expressing agnoprotein. These observations provide the first evidence for the possible involvement of agnoprotein, independent from its role in viral replication, in a series of biological events that may contribute to the pathological features seen in PML lesions.