Multiple sclerosis (MS) is a severe central nervous system disease. Experimental autoimmune encephalomyelitis (EAE) mimics MS in mice. We report that spontaneous development of EAE in RAG-1-deficient mice transgenic for a myelin basic protein (MBP)-specific TCR (TgMBP+/RAG-1−/−) requires expression of the T cell costimulatory molecule CD28. Surprisingly, T cells from CD28−/− TgMBP+/RAG-1−/− mice proliferate and produce IL-2 in response to MBP 1–17 peptide in vitro, excluding clonal anergy as the mechanism of CD28-regulated pathogenesis. Proliferation of autoaggressive T cells was dependent on the concentration of the MBP peptide, as was the development of MBP-induced EAE in CD28-deficient PL/J mice. These results provide the first genetic evidence that CD28 costimulation is crucial for MBP-specific T cell activation in vivo and the initiation of spontaneous EAE.