In experimental allergic encephalomyelitis (EAE), T cells infiltrate the central nervous system (CNS) and induce inflammation. These CD4⁺ T cells secrete interferon (IFN)‐γ, levels of which correlate with disease severity, and which is proposed to play a key role in disease induction. Many strains of mice are resistant to EAE. We have studied the effect of deletion of IFN‐γ on the ability to induce EAE in resistant BALB/c‐backcrossed mice. As expected, only 0–6 % of BALB/c or BALB/c‐backcrossed mice developed EAE when immunized with myelin basic protein in adjuvant. Strikingly, abrogation of IFN‐γ expression by targeted disruption of the IFN‐γ gene (GKO mice) converted them to a susceptible phenotype. As many as 71 % of these IFN‐γ‐deficient mice developed EAE, a frequency comparable to that seen with the susceptible SJL/J strain. In addition, EAE was of unusually high severity in mice lacking IFN‐γ. Immunological characteristics of disease in IFN‐γ‐deficient mice were comparable to those seen in susceptible (SJL/J) mice with EAE, including perivascular infiltration in the CNS and order‐of‐magnitude increases for both CD3 γ chain and TNF‐α mRNA levels in the spinal cord. We thus demonstrate that lack of IFN‐γ converts an otherwise EAE‐resistant mouse strain to become susceptible to disease. Therefore, in BALB/c mice, IFN‐γ confers resistance to EAE.