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It is known that oxidative stress produced by proinflammatory myeloid cells plays an important role in demyelination and neuronal injury in progressive multiple sclerosis (MS). Myeloperoxidase (MPO) is a pro-oxidative enzyme released from myeloid cells during inflammation. It has been shown that MPO-dependent oxidative stress plays important roles in inducing tissue injury in many inflammatory diseases. In this report, we treated NOD experimental autoimmune encephalomyelitis (EAE) mice, a murine model of progressive MS, with N-acetyl lysyltyrosylcysteine amide (KYC), a novel specific MPO inhibitor. Our data showed that KYC treatment not only attenuated MPO-mediated oxidative stress but also reduced demyelination and axonal injury in NOD EAE mice. More importantly, we found that KYC treatment increased oligodendrocyte regeneration and neurogenesis in NOD EAE mice. Taken together, our data suggests that targeting MPO should be a good therapeutic approach for reducing oxidative injury and preserving neuronal function in progressive MS patients.