Pelizaeus-Merzbacher disease (PMD) is an X-linked leukodystrophy caused by mutations in Proteolipid Protein 1 (PLP1), encoding a major myelin protein, resulting in profound developmental delay and early lethality. Previous work showed involvement of unfolded protein response (UPR) and endoplasmic reticulum (ER) stress pathways, but poor PLP1 genotype-phenotype associations suggest additional pathogenetic mechanisms. Using induced pluripotent stem cell (iPSC) and gene-correction, we show that patient-derived oligodendrocytes can develop to the pre-myelinating stage, but subsequently undergo cell death. Mutant oligodendrocytes demonstrated key hallmarks of ferroptosis including lipid peroxidation, abnormal iron metabolism, and hypersensitivity to free iron. Iron chelation rescued mutant oligodendrocyte apoptosis, survival, and differentiationin vitro, and post-transplantation in vivo. Finally, systemic treatment of Plp1 mutant Jimpy mice with deferiprone, a small molecule iron chelator, reduced oligodendrocyte apoptosis and enabled myelin formation. Thus, oligodendrocyte iron-induced cell death and myelination is rescued by iron chelation in PMD pre-clinical models.