Duplications and overexpression of the proteolipid protein (PLP) gene are known to cause the dysmyelinating disorder Pelizaeus-Merzbacher disease (PMD). To understand the cellular response to overexpressed PLP in PMD, we have overexpressed PLP in BHK cells and primary cultures of oligodendrocytes with the Semliki Forest virus expression system. Overexpressed PLP was routed to late endosomes/lysosomes and caused a sequestration of cholesterol in these compartments. Similar results were seen in transgenic mice overexpressing PLP. With time, the endosomal/lysosomal accumulation of cholesterol and PLP led to an increase in the amount of detergent-insoluble cellular cholesterol and PLP. In addition, two fluorescent sphingolipids, BODIPY-lactosylceramide and -galactosylceramide, which under normal conditions are sorted to the Golgi apparatus, were missorted to perinuclear structures. This was also the case for the lipid raft marker glucosylphosphatidylinositol-yellow fluorescence protein, which under normal steady-state conditions is localized on the plasma membrane and to the Golgi complex. Taken together, we show that overexpression of PLP leads to the formation of endosomal/lysosomal accumulations of cholesterol and PLP, accompanied by the mistrafficking of raft components. We propose that these accumulations perturb the process of myelination and impair the viability of oligodendrocytes.