Myelin is essential to neuronal health and CNS function, and oligodendrocytes (OLs) undergo a complex process of cytoskeletal remodeling to form compact myelin sheaths. We previously discovered that a formin protein, Dishevelled associated activator of morphogenesis 2 (Daam2), suppresses OL differentiation through Wnt signaling; however, its role in cytoskeletal control remains unknown. To investigate this, we used OL-specific Daam2 conditional knockout (Daam2 cKO) mice of either sex and found myelin decompaction during an active period of myelination in postnatal development and motor coordination deficits in adulthood. Using primary OL cultures, we found Daam2-depleted OLs showed morphologic dysregulation during differentiation, suggesting that Daam2 regulates the OL cytoskeleton. In vivo screening identified the actin regulators Rac1 and Gelsolin as possible effectors in Daam2-deficient OL cytoskeletal regulation. Using gain-of-function and loss-of-function (LOF) experiments in primary OLs, we found that Rac1 and Gelsolin operate downstream of Daam2 in OL differentiation, with Gelsolin and Daam2 promoting and inhibiting membrane spreading during late differentiation, respectively. In vivo experiments using Daam2 cKO mice revealed increased protein levels of Gelsolin in the developing white matter with no change in RNA levels, suggesting that Daam2 acts in a posttranslational manner to suppress Gelsolin levels. In vitro biochemical studies show Daam2 induces Gelsolin ubiquitination and degradation in OLs. Together, our studies show Daam2 is essential for formation of functional myelin through modulation of Gelsolin levels to regulate the OL cytoskeleton. These findings further demonstrate the critical role of cytoskeletal dynamics in myelination and reveal novel avenues for treatment of a variety of white matter diseases. SIGNIFICANCE STATEMENT Proper myelin formation is essential to CNS function, and oligodendrocytes (OLs) require extensive changes in the actin cytoskeleton to form myelin sheaths. Here, we show that the formin protein Dishevelled associated activator of morphogenesis 2 (Daam2) is necessary for myelin compaction during development and motor learning in adulthood. Further, we demonstrate that Daam2 regulates OL differentiation and morphology through actin regulators Rac1 and Gelsolin. Lastly, we find that Daam2 may control myelin compaction by modulating the ubiquitination and degradation of Gelsolin through recruitment of the E3 ubiquitin ligase Nedd4. These findings reveal novel pathways for regulating myelin structure and function during white matter development.