Myelin-specific effector Th1 cells are able to perpetuate CNS inflammation in experimental autoimmune encephalomyelitis, an animal model representative of multiple sclerosis. Although the effects of cytokines in the CNS microenvironment on naive CD4(+) T cells have been well described, much less is known about their ability to influence Ag-experienced effector cells. TGF-beta is a multifunctioning cytokine present in the healthy and inflamed CNS with well-characterized suppressive effects on naive T cell functions. However, the effects of TGF-beta on effector Th1 cells are not well defined. Using myelin-specific TCR transgenic mice, we demonstrate that TGF-beta elicits differential effects on naive versus effector Th1 cells. TGF-beta enhances cellular activation, proliferation, and cytokine production of effector Th1 cells; however, adoptive transfer of these cells into naive mice showed a reduction in encephalitogenicity. We subsequently demonstrate that the reduced encephalitogenic capacity is due to the ability of TGF-beta to promote the self-regulation of Th1 effector cells via IL-10 production. These data demonstrate a mechanism by which TGF-beta is able to suppress the encephalitogenicity of myelin-specific Th1 effector cells that is unique from its suppression of naive T cells.