Remyelination failure in multiple sclerosis (MS) contributes to progression of disability. The deficient repair results from neuroinflammation and deposition of inhibitors including chondroitin sulfate proteoglycans (CSPGs). Which CSPG member is repair-inhibitory or alters local inflammation to exacerbate injury is unknown. Here, we correlate high versican-V1 expression in MS lesions with deficient premyelinating oligodendrocytes, and highlight its selective upregulation amongst CSPG members in experimental autoimmune encephalomyelitis (EAE) lesions modeling MS. In culture, purified versican-V1 inhibits oligodendrocyte precursor cells (OPCs) and promotes T helper 17 (Th17) polarization. Versican-V1-exposed Th17 cells are particularly toxic to OPCs. In NG2CreER:MAPTmGFP mice illuminating newly formed GFP+ oligodendrocytes/myelin, difluorosamine (peracetylated,4,4-difluoro-N-acetylglucosamine) treatment from peak EAE reduces lesional versican-V1 and Th17 frequency, while enhancing GFP+ profiles. We suggest that lesion-elevated versican-V1 directly impedes OPCs while it indirectly inhibits remyelination through elevating local Th17 cytotoxic neuroinflammation. We propose CSPG-lowering drugs as potential dual pronged repair and immunomodulatory therapeutics for MS.