Theiler's virus causes a persistent and demyelinating infection of the central nervous system of the mouse, which is one of the best animal models to study multiple sclerosis. This review focuses on the mechanism of persistence. The virus infects neurons for a few weeks and then shifts to white matter, where it persists in glial cells and macrophages. Oligodendrocytes are crucial host cells, as shown by the resistance to persistent infection of mice bearing myelin mutations. Two viral proteins, L and L*, contribute to persistence by interfering with host defenses. L, a small zinc-finger protein, restricts the production of interferon. L*, a unique example of a picornaviral protein translated from an overlapping open reading frame, facilitates the infection of macrophages. Susceptibility to persistent infection, which varies among inbred mouse strains, is multigenic. H2 class I genes have a major effect on susceptibility. Among several non-H2 susceptibility loci, Tmevp3 appears to regulate the expression of important cytokines.