Multiple sclerosis (MS) is a disabling inflammatory demyelinating disease of the central nervous system, considered to result from self-reactivity to myelin antigens. Tumor necrosis factor (TNF) and the p55 TNF receptor (TNFR) have been strongly implicated in MS pathogenesis. We reveal in this study a dual role for TNF in experimental autoimmune encephalomyelitis (EAE), a mouse model for MS. In addition to its well-established proinflammatory effects, TNF exhibits potent immunosuppressive properties, providing one possible explanation for the immune and disease activating effect of anti-TNF treatment of MS. We show that in TNF-deficient mice, myelin-specific T cell reactivity fails to regress and expansion of activated/memory T cells is abnormally prolonged, leading to exacerbated EAE. Strikingly, immnosuppression by TNF and protection against EAE does not require the p55 TNFR, whereas the same receptor is necessary for the detrimental effects of TNF during the acute phase of the disease. Thus, blocking the function of the p55 TNFR in autoimmune demyelination may inhibit the noxious proinflammatory activities of TNF without compromising its immunosuppressive properties.