Endoplasmic reticulum (ER) stress is a homeostatic mechanism, which is used by cells to adapt to intercellular and intracellular changes. Moreover, ER stress is closely linked to inflammatory pathways. We hypothesized that ER stress is an integral component of neuroinflammation and contributes to the development of neurological diseases. In autopsied brain specimens from multiple sclerosis (MS) and non-MS patients, XBP-1 spliced variant (XBP-1/s) was increased in MS brains (p < 0.05) and was correlated with the expression of the human endogenous retrovirus-W envelope transcript, which encodes the glycoprotein, Syncytin-1 (p < 0.05). In primary human fetal astrocytes transfected with a Syncytin-1-expressing plasmid, XBP-1/s, BiP, and NOS2 were induced, which was suppressed by crocin treatment (p < 0.05). Crocin also protected oligodendrocytes exposed to cytotoxic supernatants derived from Syncytin-1-expressing astrocytes (p < 0.05) and NO-mediated oligodendrocytotoxicity (p < 0.05). During experimental autoimmune encephalomyelitis (EAE), the transcript levels of the ER stress genes XBP-1/s, BiP, PERK, and CHOP were increased in diseased spinal cords compared with healthy littermates (p < 0.05), although CHOP expression was not involved in the EAE disease phenotype. Daily treatment with crocin starting on day 7 post-EAE induction suppressed ER stress and inflammatory gene expression in spinal cords (p < 0.05), which was accompanied by preserved myelination and axonal density, together with reduced T cell infiltration and macrophage activation. EAE-associated neurobehavioral deficits were also ameliorated by crocin treatment (p < 0.05). These findings underscored the convergent roles of pathogenic ER stress and immune pathways in neuroinflammatory disease and point to potential therapeutic applications for crocin.