There is controversy regarding the possible role of glial cells as APCs in the pathogenesis of central nervous system (CNS) demyelinating diseases such as multiple sclerosis and its animal model, experimental autoimmune encephalomyelitis (EAE). Microglia have been clearly shown to present Ag in the CNS, and due to the proximity of activated astroglial cells to infiltrating T cells and macrophages in demyelinating lesions, it is also possible that astrocytes positively or negatively regulate disease initiation and/or progression. We examined the capacity of IFN-γ-treated astrocytes from EAE-susceptible SJL/J mice to process and present myelin epitopes. IFN-γ activation up-regulated ICAM-1, VCAM-1, MHC class II, invariant chain, H2-M, CD40, and B7-1 as determined by FACS and/or RT-PCR analyses. B7-2 expression was only marginally enhanced on SJL/J astrocytes. Consistent with the expression of these accessory molecules, IFN-γ-treated SJL/J astrocytes induced the B7-1-dependent activation of Th1 lines and lymph node T cells specific for the immunodominant encephalitogenic proteolipid protein (PLP) epitope (PLP 139–151) as assessed by proliferation and activation for the adoptive transfer of EAE. Interestingly, IFN-γ-activated astrocytes efficiently processed and presented PLP 139–151, but not the subdominant PLP 178–191, PLP 56–70, or PLP 104–117 epitopes, from intact PLP and a recombinant variant fusion protein of PLP (MP4). The data are consistent with the hypothesis that astrocytes in the proinflammatory CNS environment have the capability of activating CNS-infiltrating encephalitogenic T cells specific for immunodominant epitopes on various myelin proteins that may be involved in either the initial or the relapsing stages of EAE.