The ability of resident cells to induce apoptosis of invading immune cells is a major regulatory factor operating in immune-privileged tissues, including the nervous system. We investigated the cellular and molecular factors participating in modulation of immune response in peripheral nerves, focusing on two cytotoxic pathways: fas ligand (fasL) and perforin. fasL and perforin expression was found by immunochemistry on Schwann cells (Sc) in nerve biopsies from patients with chronic inflammatory demyelinating polyneuritis and on human Sc cultures. Treatment of Sc with tumor necrosis factor (TNF) α and interferon (IFN) γ upregulated the expression of both molecules. In a coculture model, Sc exposed to TNFα or IFNγ were able to induce both apoptotic and lytic injury of T-lymphocytes. Inactivation of fasL with the neutralizing antibody NOK-2 abolished T-cell apoptosis induced by Sc treated with TNFα, but not by Sc treated with IFNγ. Conversely, T-cell lysis was significantly decreased when IFNγ-activated Sc were treated with concanamycin A, which inhibited perforin release. At variance with T-lymphocytes, B-cells were less sensitive to cytokine-treated Sc toxicity. Thus, Sc exposed to inflammatory cytokines have the capacity of inducing selective damage of T-lymphocytes and have the potential of regulating the immune response in the peripheral nervous system. © 2003 Wiley-Liss, Inc.