CD40 ligand-CD40 interactions are important in the development of experimental autoimmune encephalomyelitis (EAE), but it is unclear whether this interaction is critical for de novo recruitment of T cells, entry of T cells into the central nervous system (CNS), or effector function of T cells in vivo. In this report we define the role of CD40 in a model of progressive EAE that does not depend on epitope spread or recruitment of new myelin-specific T cells into the CNS. Results show that CD40 is not required for trans-migration of activated T cells through the endothelial blood-brain barrier, and in its absence T cells will both enter the CNS and induce disease. However, interaction with CD40 is critical for optimal activation and encephalitogenicity of cloned Th1 cells. In its presence, Th1 cells enter the CNS earlier and induce more severe disease. Inclusion of IL-12 during activation of Th1 cells in the absence of CD40 can override the otherwise suboptimal level of encephalitogenicity observed. The implication of these findings for therapeutic use of agents designed to block this pathway is discussed.