Intramembranous proteolysis by the γ-secretase complex is a key regulator of transmembrane protein turnover and intracellular signaling. Small molecule inhibitors of γ-secretase (γSI) have previously been shown to suppress Th1 differentiation and reduce the severity of EAE, presumably by affecting Notch1 signaling. In order to understand the mechanisms through which γSI affect T effector responses we examined helper T cell polarization and function in vitro and in EAE. In vitro γSI treatment reduced T cell production of the Th1 cytokine IFNγ. We found γSI do not change activation but have effects on proliferation. Additionally, expression of the Th1 transcription factor Tbet was also diminished in γSI treated T cells. Looking upstream of Tbet expression, we found that γSI modulated STAT1 phosphorylation induced by exposing the cells to IFNγ. These results suggest that γSI might work at preventing Th1 differentiation but do not address the affects γSI may have on fully differentiated Th1 cells. We found that treatment with a γSI reduced the severity of EAE induced by adoptive transfer of myelin-specific TCR-transgenic T cells. Antigen recall experiments demonstrated that there was a dramatic decrease in the production of IFNγ by T cells ex vivo. These results demonstrate that γSI act not just to diminish differentiation of myelin-specific T cells into autoimmune Th1 effectors but impair the ability of established Th1 cells to cause damage to the CNS.