Missense mutations in the human PLP1 gene lead to dysmyelinating diseases with a broad range of clinical severity, ranging from severe Pelizaeus-Merzbacher disease (PMD) to milder spastic paraplegia type 2 (SPG-2). The molecular pathology has been generally attributed to endoplasmic reticulum (ER) retention of misfolded proteolipid protein (PLP) (and its splice isoform DM20) and induction of the unfolded protein response. As opposed to previous studies of heterologous expression systems, we have analyzed PLP/DM20 trafficking in oligodendroglial cells, thereby revealing differences between PMD and SPG-2-associated PLP/DM20 isoforms. PLP(A242V) and DM20(A242V) (jimpy-msd in mice), associated with severe PMD-like phenotype in vivo, were not only retained in the ER but also interfered with oligodendroglial process formation. In contrast, glial cells expressing SPG-2-associated PLP(I186T) or DM20(I186T) (rumpshaker in mice) developed processes, and mutant PLP/DM20 reached a late endosomal/lysosomal compartment. Unexpectedly, PLP/DM20 with either substitution exhibited impaired cholesterol binding, and the association with lipid raft microdomains was strongly reduced. Turnover analysis demonstrated that mutant PLP was rapidly degraded in oligodendroglial cells, with half-lives for PLP > PLP(I186T) > PLP(A242V). Protein degradation was specifically sensitive to proteasome inhibition, although PLP/DM20(I186T) degradation was also affected by inhibition of lysosomal enzymes. We conclude that, in addition to ER retention and unfolded protein response (UPR) induction, impaired cholesterol binding and lipid raft association are characteristic cellular defects of PLP1-missense mutations. Mutant protein is rapidly cleared and does not accumulate in oligodendroglial cells. Whereas UPR-induced cell death governs the PMD phenotype of the msd mutation, we propose that impaired cholesterol and lipid raft interaction of the rsh protein may contribute to the dysmyelination observed in SPG-2.