Experimental autoimmune encephalomyelitis (EAE) is a CD4 Th1-mediated inflammatory demyelinating disorder of the CNS and a well-established animal model for multiple sclerosis. Src homology 2 domain-containing protein tyrosine phosphatase 1 (SHP-1) is a cytosolic tyrosine phosphatase that is involved in regulating the T cell activation cascade from signals initiated through the TCR. To study the role of SHP-1 in EAE pathogenesis, we immunized B10.PL mice heterozygous for deletion of the SHP-1 gene (me(v+/-)) and B10.PL wild-type mice with the immunodominant epitope of myelin basic protein (MBP Ac1-11). T cell proliferation and IFN-gamma production were significantly increased in me(v+/-) mice after immunization with MBP Ac1-11. The frequency of MBP Ac1-11-specific CD4 T cells, analyzed by staining with fluorescently labeled tetramers (MBP1-11[4Y]: I-A(u) complexes), was increased in the draining lymph node cells of me(v+/-) mice compared with wild-type mice. In addition, me(v+/-) mice developed a more severe course of EAE with epitope spreading to proteolipid protein peptide 43-64. Finally, expansion of MBP Ac1-11-specific T cells in response to Ag was enhanced in me(v+/-) T cells, particularly at lower Ag concentrations. These data demonstrate that the level of SHP-1 plays an important role in regulating the activation threshold of autoreactive T cells.