Theiler's murine encephalomyelitis virus (TMEV)-induced demyelinating disease (TMEV-IDD) serves as virus-induced model of chronic progressive multiple sclerosis. Infection of susceptible SJL/J mice leads to life-long CNS virus persistence and a progressive autoimmune demyelinating disease mediated by myelin-specific T cells activated via epitope spreading. In contrast, virus is rapidly cleared by a robust CTL response in TMEV-IDD-resistant C57BL/6 mice. We investigated whether differential induction of regulatory T cells (Tregs) controls susceptibility to TMEV-IDD. Infection of disease-susceptible SJL/J, but not B6 mice, leads to rapid activation and expansion of Tregs resulting in an unfavorable CNS ratio of Treg:Teffector cells. In addition, anti-CD25-induced inactivation of Tregs in susceptible SJL/J, but not resistant B6, mice results in significantly decreased clinical disease concomitant with enhanced anti-viral CD4 + , CD8 + and antibody responses resulting in decreased CNS viral titers. This is the first demonstration that virus-induced Treg activation regulates susceptibility to autoimmune disease differentially in susceptible and resistant strains of mice and provides a new mechanistic explanation for the etiology of infection-induced autoimmunity.