Chronic experimental allergic encephalomyelitis (CEAE) is an established experimental model for multiple sclerosis (MS). The demyelinating lesions in the white matter of the central nervous system observed in CEAE and in MS are accompanied by various neurophysiological alterations. Among the best defined electrophysiological abnormalities are the changes in event-related potentials, in particular evoked potentials involving the spinal cord, i.e. motor and sensory evoked potentials. Less familiar are the changes observed in the electroencephalogram of CEAE-affected animals, which are also encountered in the human equivalent, MS. In the present experiment we evaluated the therapeutic value of a neurotrophic peptide treatment [H-Met(O2)-Glu-His-Phe-d-Lys-Phe-OH, an ACTH4–9 analogue] and its effect on the delayed flash visual evoked potentials (VEP) and power spectra of the electroencephalogram, during a 17-week follow-up of CEAE. CEAE animals treated with the neurotrophic peptide were protected against the development of neurological symptoms during the course of the demyelinating syndrome. VEPs of animals suffering from CEAE showed a delay of the latencies of the late components which was significantly counteracted by peptide treatment. The peak-to-peak amplitude of the VEP afterdischarge recorded from CEAE animals was significantly increased during the course of CEAE and correlated closely with the progression of the myelinopathy. Furthermore, CEAE animals showed an increase of electroencephalogram (EEG) beta activity of up to 500% as compared with the age-matched control group. This increase in beta power mainly consisted of a prevailing 20–21 Hz peak, a frequency that normally is not dominant in control EEG recordings of the rat during passive wakefulness. All these electrophysiological phenomena were absent in ACTH4–9 analogue-treated animals. The present findings underscore the potential importance of a neurotrophic peptide treatment in the pharmacotherapy of central demyelinating syndromes, and possibly of MS.