Experimental allergic encephalomyelitis (EAE) is an autoimmune inflammatory disease of the central nervous system (CNS) which causes paralysis. Several studies have reported the involvement of Ia antigen-expressing cells in the pathogenesis of EAE. Interferon-gamma (IFN-γ) can induce Ia antigen expression on a wide range of cells. We examined the effect of IFN-γ on EAE in Lewis rats. Systemically administered IFN-γ did not change the disease course of EAE, whereas IFN-γ applied locally into the ventricular system of the CNS resulted in complete suppression of clinical signs. Furthermore, we found that systemic administration of anti-IFN-γ just prior to the onset of clinical symptoms resulted in a more severe disease course. We conclude that IFN-γ is capable of exerting a suppressive action in EAE, possibly through induction of Ia antigen expression or through the induction of suppressive mechanisms locally in the CNS.