The effectiveness of interleukin 10 (IL-10) in the treatment of autoimmune-mediated central nervous system inflammation is controversial. Studies of the model system, experimental autoimmune encephalomyelitis (EAE), using various routes, regimens, and delivery methods of IL-10 suggest that these variables may affect its immunoregulatory function. To study the influence of these factors on IL-10 regulation of EAE pathogenesis, we have analyzed transgenic mice expressing human IL-10 (hIL-10) transgene under the control of a class II major histocompatibility complex (MHC) promoter. The hIL-10 transgenic mice are highly resistant to EAE induced by active immunization, and this resistance appears to be mediated by suppression of autoreactive T cell function. Myelin-reactive T helper 1 cells are induced but nonpathogenic in the IL-10 transgenic mice. Antibody depletion confirmed that EAE resistance is dependent on the presence of the transgenic IL-10. Mice expressing the hIL-10 transgene but not the endogenous murine IL-10 gene demonstrated that transgenic IL-10 from MHC class II–expressing cells is sufficient to block induction of EAE. This study demonstrates that IL-10 can prevent EAE completely if present at appropriate levels and times during disease induction.