Agonists of liver X receptors (LXR), members of the nuclear hormone receptor superfamily, alter secretion of proinflammatory cytokines, suggesting potential antiinflammatory effects. A synthetic LXR agonist inhibited T‐cell proliferation and cytokine release in a dose‐dependent manner. Treatment of mice during induction of experimental autoimmune encephalomyelitis reduced clinical symptoms, central nervous system cellular inflammation, and major histocompatibility class II expression on microglia, as well as demyelination. In contrast to in vitro analysis, no reductions in peripheral neuroantigen specific T‐cell responses were detected in comparing ligand and vehicle treated mice. These data suggest that LXR agonists play an important protective role in the regulation of T‐cell‐mediated inflammatory disease of the central nervous system. © 2006 Wiley‐Liss, Inc.