The OX-40R is a member of the TNF receptor family and is expressed primarily on activated CD4+ T cells. When the OX-40R is engaged by the OX-40 ligand (OX-40L), a potent costimulatory signal occurs. We have identified a population of CD11b+ cells, isolated from the central nervous system (CNS) of mice with actively induced experimental allergic encephalomyelitis (EAE), that expresses OX-40L. Moreover, the expression of OX-40L was found to be associated with paralytic episodes of EAE and was reduced or absent at disease recovery. These CD11b+ cells also coexpressed B7 and MHC class II. Therefore, to address the relative contributions of OX-40R/OX-40L and CD28/B7 to the costimulation of myelin-specific T cells, blocking studies were performed using soluble OX-40R and/or soluble CTLA-4. CD11b+ cells isolated from the CNS of mice with actively induced EAE were able to present Ag to proteolipid protein 139-151-specific T cell lines in vitro. The addition of soluble OX-40R:Ig to CD11b+ brain microglia/macrophages inhibited T cell proliferation by 50-70%. The addition of CTLA-4:Ig inhibited T cell proliferation by 20-30%, and the combination inhibited T cell proliferation by 95%. In vivo administration of soluble OX-40R at the onset of actively induced or adoptively transferred EAE reduced ongoing signs of disease, and the mice recovered more quickly from acute disease. The data imply that OX-40L, expressed by CNS-derived APC, acts to provide an important costimulatory signal to EAE effector T cells found within the inflammatory lesions. Furthermore, the data suggest that agents designed to inhibit the OX-40L/OX-40R complex may be useful for treating autoimmune disease.