Laquinimod is an oral drug currently being evaluated for the treatment of relapsing, remitting, and primary progressive multiple sclerosis and Huntington's disease. Laquinimod exerts beneficial activities on both the peripheral immune system and the CNS with distinctive changes in CNS resident cell populations, especially astrocytes and microglia. Analysis of genome-wide expression data revealed activation of the aryl hydrocarbon receptor (AhR) pathway in laquinimod-treated mice. The AhR pathway modulates the differentiation and function of several cell populations, many of which play an important role in neuroinflammation. We therefore tested the consequences of AhR activation in myelin oligodendrocyte glycoprotein (MOG)-induced experimental autoimmune encephalomyelitis (EAE) using AhR knockout mice. We demonstrate that the pronounced effect of laquinimod on clinical score, CNS inflammation, and demyelination in EAE was abolished in AhR −/− mice. Furthermore, using bone marrow chimeras we show that deletion of AhR in the immune system fully abrogates, whereas deletion within the CNS partially abrogates the effect of laquinimod in EAE. These data strongly support the idea that AhR is necessary for the efficacy of laquinimod in EAE and that laquinimod may represent a first-in-class drug targeting AhR for the treatment of multiple sclerosis and other neurodegenerative diseases.aryl hydrocarbon receptor | EAE | laquinimod L aquinimod is an oral drug that is currently in late-stage clinical development for the treatment of relapsing remitting multiple sclerosis (RRMS), primary progressive MS, and Huntington's disease. Current knowledge indicates that laquinimod exerts activities both on the peripheral immune system and within the CNS. Laquinimod, at the 0.6-mg/d dose, has demonstrated efficacy in phase II and III MS clinical trials, in which it reduced relapse rate, disability progression, development of new and active MRI lesions, and brain atrophy (1-3). The clinical efficacy profile of laquinimod is characterized by a dissociation of the moderate magnitude of the effect on relapse reduction and its associated inflammatory MRI findings and the disproportionally large effect on disability progression. Such an efficacy profile in patients with RRMS may relate to a distinctive intracerebral activity potentially mediated via changes in CNS resident cell populations, potentially astrocytes and microglia.