IL-27 has been shown to play a suppressive role in experimental autoimmune encephalomyelitis (EAE) as demonstrated by more severe disease in IL-27R-deficient (WSX-1−/−) mice. However, whether IL-27 influences the induction or effector phase of EAE is unknown. This is an important question as therapies for autoimmune diseases are generally started after autoreactive T cells have been primed. In this study, we demonstrate maximal gene expression of IL-27 subunits and its receptor in the CNS at the effector phases of relapsing-remitting EAE including disease peak and onset of relapse. We also show that activated astrocyte cultures secrete IL-27p28 protein which is augmented by the endogenous factor, IFN-γ. To investigate functional significance of a correlation between gene expression and disease activity, we examined the effect of IL-27 at the effector phase of disease using adoptive transfer EAE. Exogenous IL-27 potently suppressed the ability of encephalitogenic lymph node and spleen cells to transfer EAE. IL-27 significantly inhibited both nonpolarized and IL-23-driven IL-17 production by myelin-reactive T cells thereby suppressing their encephalitogenicity in adoptive transfer EAE. Furthermore, we demonstrate a strong suppressive effect of IL-27 on active EAE in vivo when delivered by sc osmotic pump. IL-27-treated mice had reduced CNS inflammatory infiltration and, notably, a lower proportion of Th17 cells. Together, these data demonstrate the suppressive effect of IL-27 on primed, autoreactive T cells, particularly, cells of the Th17 lineage. IL-27 can potently suppress the effector phase of EAE in vivo and, thus, may have therapeutic potential in autoimmune diseases such as multiple sclerosis.