The role of central nervous system (CNS) glia in sustaining self-autonomous inflammation and driving clinical progression in multiple sclerosis (MS) is gaining scientific interest. We applied a single transcription factor (SOX10)-based protocol to accelerate oligodendrocyte differentiation from human induced pluripotent stem cell (hiPSC)-derived neural precursor cells, generating self-organizing forebrain organoids. These organoids include neurons, astrocytes, oligodendroglia, and hiPSC-derived microglia to achieve immunocompetence. Over 8weeks, organoids reproducibly generated mature CNS cell types, exhibiting single-cell transcriptional profiles similar to the adult human brain. Exposed to inflamed cerebrospinal fluid (CSF) from patients with MS, organoids properly mimic macroglia-microglia neurodegenerative phenotypes and intercellular communication seen in chronic active MS. Oligodendrocyte vulnerability emerged by day 6 post-MS-CSF exposure, with nearly 50% reduction. Temporally resolved organoid data support and expand on the role of soluble CSF mediators in sustaining downstream events leading to oligodendrocyte death and inflammatory neurodegeneration. Such findings support the implementation of this organoid model for drug screening to halt inflammatory neurodegeneration.