Ever since the use of interferon-γ to treat patients with multiple sclerosis resulted in enhanced disease, the role of IFN-γ in demyelination has been under question. To address this issue directly, transgenic mice were generated that expressed the cDNA of murine IFN-γ in the central nervous system by using an oligodendrocyte-specific promoter. Expression of the transgene occurred after 8 weeks of age, at which time the murine immune and central nervous systems are both fully developed. Directly associated with transgene expression, primary demyelination occurred and was accompanied by clinical abnormalities consistent with CNS disorders. Additionally, multiple hallmarks of immune-mediated CNS disease were observed including upregulation of MHC molecules, gliosis and lymphocytic Infiltration. These results demonstrate a direct role for IFN-γ as an inducer of CNS demyelination leading to disease and provide new opportunities for dissecting the mechanism of demyelination.