CD8+ T cells infiltrating the CNS control infection by the neurotropic JHM strain of mouse hepatitis virus. Differential susceptibility of infected cell types to clearance by perforin or IFN-γ uncovered distinct, nonredundant roles for these antiviral mechanisms. To separately evaluate each effector function specifically in the context of CD8+ T cells, pathogenesis was analyzed in mice deficient in both perforin and IFN-γ (PKO/GKO) or selectively reconstituted for each function by transfer of CD8+ T cells. Untreated PKO/GKO mice were unable to control the infection and died of lethal encephalomyelitis within 16 days, despite substantially higher CD8+ T cell accumulation in the CNS compared with controls. Uncontrolled infection was associated with limited MHC class I up-regulation and an absence of class II expression on microglia, coinciding with decreased CD4+ T cells in CNS infiltrates. CD8+ T cells from perforin-deficient and wild-type donors reduced virus replication in PKO/GKO recipients. By contrast, IFN-γ-deficient donor CD8+ T cells did not affect virus replication. The inability of perforin-mediated mechanisms to control virus in the absence of IFN-γ coincided with reduced class I expression. These data not only confirm direct antiviral activity of IFN-γ within the CNS but also demonstrate IFN-γ-dependent MHC surface expression to guarantee local T cell effector function in tissues inherently low in MHC expression. The data further imply that IFN-γ plays a crucial role in pathogenesis by regulating the balance between virus replication in oligodendrocytes, CD8+ T cell effector function, and demyelination.