To study the involvement of TNF in cerebral pathology in vivo and to define cellular interactions within the central nervous system (CNS) that promote TNF signaling, we have expressed this cytokine either as a wild-type or a mutant transmembrane form in astrocytes or neurons of transgenic mice. Mice expressing wild-type human TNF in either of these cell types spontaneously develop a neurologic disorder manifested by ataxia, seizures, and paralysis and bear histologic evidence of chronic CNS inflammation and degeneration. Moreover, astrocyte-specific expression of transmembrane TNF triggers a similar neurologic phenotype. Interestingly, transgenic mice producing a high level of transmembrane TNF in their neurons develop no apparent phenotypic abnormalities, suggesting that appropriate cellular interactions should form to allow for contact-dependent TNF signals to induce CNS pathology. These results demonstrate that target cells mediating the neuroinflammatory activities of TNF localize in the vicinity of astrocytes rather than neurons.