Fingolimod (FTY720) is an orally available sphingosine-1-phosphate (S1P) receptor modulator reducing relapse frequency in patients with relapsing–remitting multiple sclerosis (RRMS). In addition to immunosuppression, neuronal protection by FTY720 has also been suggested, but remains controversial. Axial and radial diffusivities derived from in vivo diffusion tensor imaging (DTI) were employed as noninvasive biomarkers of axonal injury and demyelination to assess axonal protection by FTY720 in experimental autoimmune encephalomyelitis (EAE) mice. EAE was induced through active immunization of C57BL/6 mice using myelin oligodendrocyte glycoprotein peptide 35–55 (MOG35–55). We evaluated both the prophylactic and therapeutic treatment effect of FTY720 at doses of 3 and 10 mg/kg on EAE mice by daily clinical scoring and end-point in vivo DTI. Prophylactic administration of FTY720 suppressed the disease onset and prevented axon and myelin damage when compared with EAE mice without treatment. Therapeutic treatment by FTY720 did not prevent EAE onset, but reduced disease severity, improving axial and radial diffusivity towards the control values without statistical significance. Consistent with previous findings, in vivo DTI-derived axial and radial diffusivity correlated with clinical scores in EAE mice. The results support the use of in vivo DTI as an effective outcome measure for preclinical drug development. Copyright © 2013 John Wiley & Sons, Ltd.