T cell activation involves not only recognition of antigen presented by the MHC, but also nonspecific interactions termed "costimulation." The costimulatory molecules B7-1 and B7-2 are ligands on antigen-presenting cells for the CD28 and CTLA-4 receptors on T cells. Previously, a fusion protein consisting of human CTLA-4 linked to human Fc was shown to bind B7-1 and B7-2 with high avidity and to prevent specific T cell activation. Here we investigated the effects of a recombinant fusion protein consisting of the extracellular domain of human CTLA-4 bound to mouse IgG2a Fc (CTLA-4-Fc) upon experimental autoimmune encephalomyelitis, a T cell-mediated disease that serves as a model for multiple sclerosis. CTLA-4-Fc prevented experimental autoimmune encephalomyelitis in 26 of 28 CTLA-4-Fc-treated mice (median maximum score 0), whereas 28 of 30 mice treated with control mouse IgG2a developed disease (median maximum score 2.75). Less inflammation and virtually no demyelination or axonal loss occurred in CTLA-4-Fc-treated compared with control-treated mice. Activated splenocytes from CTLA-4-Fc-treated mice were able to transfer disease adoptively to naive recipients. These results indicate a key role for the B7/CD28 system in the development of actively induced murine experimental autoimmune encephalomyelitis, suggesting an area of investigation with therapeutic potential for multiple sclerosis.