Interferon (IFN)-β is a front-line therapy for the treatment of the relapsing-remitting form of multiple sclerosis. However, its immunosuppressive mechanism of function remains incompletely understood. While it has been proposed that IFN-β suppresses the function of inflammatory myelin antigen-reactive T cells by promoting the release of immunomodulatory cytokines such as IL-27 from antigen-presenting cells (APCs), its direct effects on inflammatory CD4+ Th1 cells are less clear. Here, we establish that IFN-β inhibits mouse IFN-γ+ Th1 cell function in the absence of APCs. CD4+ T cells express the type I interferon receptor, and IFN-β can suppress Th1 cell proliferation under APC-free stimulation conditions. IFN-β-treated myelin antigen-specific Th1 cells are impaired in their ability to induce severe experimental autoimmune encephalomyelitis (EAE) upon transfer to lymphocyte-deficient Rag1-/- mice. Polarized Th1 cells downregulate IFN-γ and IL-2, and upregulate the negative regulatory receptor Tim-3, when treated with IFN-β in the absence of APCs. Further, IFN-β treatment of Th1 cells upregulates phosphorylation of Stat1, and downregulates phosphorylation of Stat4. Our data indicate that IFN-γ-producing Th1 cells are directly responsive to IFN-β and point to a novel mechanism of IFN-β-mediated T cell suppression that is independent of APC-derived signals.