We studied the cellular basis of self tolerance of B cells specific for brain autoantigens using transgenic mice engineered to produce high titers of autoantibodies against the myelin oligodendrocyte glycoprotein (MOG), a surface component of central nervous system myelin. We generated “knock-in” mice by replacing the germline JH locus with the rearranged immunoglobulin (Ig) H chain variable (V) gene of a pathogenic MOG-specific monoclonal antibody. In the transgenic mice, conventional B cells reach normal numbers in bone marrow and periphery and express exclusively transgenic H chains, resulting in high titers of MOG-specific serum Igs. Additionally, about one third of transgenic B cells bind MOG, thus demonstrating the absence of active tolerization. Furthermore, peritoneal B-1 lymphocytes are strongly depleted. Upon immunization with MOG, the mature transgenic B cell population undergoes normal differentiation to plasma cells secreting MOG-specific IgG antibodies, during which both Ig isotype switching and somatic mutation occur. In naive transgenic mice, the presence of this substantial autoreactive B cell population is benign, and the mice fail to develop either spontaneous neurological disease or pathological evidence of demyelination. However, the presence of the transgene both accelerates and exacerbates experimental autoimmune encephalitis, irrespective of the identity of the initial autoimmune insult.