Type I IFNs, which include IFN-α, appear to have complex and broad-ranging actions in the central nervous system (CNS) that may result in protection or injury. To better understand these issues, we generated transgenic mice that produce IFN-α 1 chronically from astrocytes. These glial fibrillary acidic protein-IFN-α transgenic mice developed a progressive inflammatory encephalopathy, with marked calcium mineralization, meninoencephalitis, gliosis, and neurodegeneration. Many features of this murine encephalopathy resembled those found in certain human encephalopathies of unknown etiology; these diseases, exemplified by Aicardi-Goutières syndrome and some viral encephalopathies, show increased intrathecal production of IFN-α. Our data suggest that IFN-α overproduction may be the primary factor initiating these human diseases. Following intracerebral infection with lymphocytic choriomeningitis virus, glial fibrillary acidic protein-IFN-α mice had significantly increased survival rates associated with markedly reduced virus titers and immune pathology in the brain but normal peripheral CTL responses. Therefore, the production of IFN-α in the CNS can be a two-edged sword that on the one hand confers protection against a lethal viral infection but on the other causes significant injury to the brain. These transgenic mice provide a novel animal model in which to further evaluate the mechanisms that underlie the diverse actions of type I IFNs in the intact CNS.