Although several explanations have been proposed for destruction of myelin and oligodendrocytes in multiple sclerosis, there is no proven mechanism of injury. We postulate that the autoimmune response seen in multiple sclerosis results in a cytokine-mediated increase in nitric oxide production by macrophages/microglia, smooth muscle cells and/or endothelium of the central nervous system. 3 mechanisms of cellular damage due to nitric oxide are proposed: 1. direct nitric oxide cytotoxicity; 2. injury due to peroxynitrite formation from superoxide anion and nitric oxide; and 3. nitric oxide-mediated elevations of cellular cGMP that enhance tumor necrosis factor-alpha toxicity. In support of these hypotheses, the anti-inflammatory effectors, dexamethasone and transforming growth factor-beta, ameliorate symptoms seen in clinical multiple sclerosis and experimental allergic encephalitis, respectively. These 2 immunomodulators also inhibit induction of cytokine-mediated nitric oxide production by macrophages. An experimental design and therapeutic interventions which will evaluate the role of nitric oxide in the pathophysiology of experimental allergic encephalitis are presented.