Interferon-beta (IFN-beta) is of benefit in the treatment of multiple sclerosis (MS) and experimental autoimmune encephalomyelitis (EAE), but the mechanisms by which it exerts this beneficial effect remain uncertain. The present data demonstrate that IFN-beta therapy impairs the proliferative response to concanavalin A (ConA) and myelin basic protein (MBP), decreases expression of the CD80 molecule on leukocytes of treated mice, and may thereby impede the Th1 cell activation-promoting anergy in EAE. Moreover, IFN-beta therapy increases expression of the CTLA4 molecule, which induces a counterregulatory Th2 response. The reduction of CD80 expression with concomitant increase of CTLA4 expression alters the course of EAE and may be useful as a monitor in therapy with IFN-beta.