An unusual biphasic central nervous system disease developed in 3-week-old Swiss outbred mice after intracerebral inoculation of the DA strain of Theiler's murine encephalomyelitis virus. Nine to 20 days postinfection 86% of mice became paralyzed, and approximately one-half of these animals survived. During this period neuronal necrosis and microglial proliferation were seen in thalamus, brainstem, and spinal cord. There was an initial phase of virus growth in spinal cord followed by persistent infection at a lower concentration. Virus antigen was readily found in the cytoplasm of neurons by immunofluorescent staining early in the course of infection, whereas after 30 days there was a paucity of cells containing virus antigen which were present only in the spinal cord white matter. Between 1 and 5 months, an intense mononuclear inflammatory cell lesion evolved in the spinal cord leptomeninges and white matter, which coincided with a mild gait disturbance in some surviving mice, and patchy demyelination was found in areas of inflammation. The acute gray matter pathology would appear to be the result of direct virus lytic effect. Although the late white matter lesion culminating in demyelination probably represents a cytocidal infection similar to the situation that exists in certain picornavirus carrier culture systems, a virus-induced immunopathological process merits further study.