An increasing number of studies have documented the central role of T cell costimulation in autoimmunity. Here we show that the autoimmune diabetes-prone nonobese diabetic (NOD) mouse strain, deficient in B7-2 costimulation, is protected from diabetes but develops a spontaneous autoimmune peripheral polyneuropathy. All the female and one third of the male mice exhibited limb paralysis with histologic and electrophysiologic evidence of severe demyelination in the peripheral nerves beginning at 20 wk of age. No central nervous system lesions were apparent. The peripheral nerve tissue was infiltrated with dendritic cells, CD4⁺, and CD8⁺ T cells. Finally, CD4⁺ T cells isolated from affected animals induced the disease in NOD.SCID mice. Thus, the B7-2–deficient NOD mouse constitutes the first model of a spontaneous autoimmune disease of the peripheral nervous system, which has many similarities to the human disease, chronic inflammatory demyelinating polyneuropathy (CIDP). This model demonstrates that NOD mice have “cryptic” autoimmune defects that can polarize toward the nervous tissue after the selective disruption of CD28/B7-2 costimulatory pathway.