The absence of interleukin-10 (IL-10), a potent anti-inflammatory cytokine results in increased immune-mediated demyelination in mice infected with a neurotropic coronavirus (recombinant J2.2-V-1 [rJ2.2]). Here, we examined the therapeutic effects of increased levels of IL-10 at early times after infection by engineering a recombinant J2.2 virus to produce IL-10. We demonstrate that viral expression of IL-10, which occurs during the peak of virus replication and at the site of disease, enhanced survival and diminished morbidity in rJ2.2-infected wild-type B6 and IL-10 ؊/؊ mice. The protective effects of increased IL-10 levels were associated with reductions in microglial activation, inflammatory cell infiltration into the brain, and proinflammatory cytokine and chemokine production. Additionally, IL-10 increased both the frequency and number of Foxp3 ؉ regulatory CD4 T cells in the infected central nervous system. Most strikingly, the ameliorating effects of IL-10 produced during the first 5 days after infection were long acting, resulting in decreased demyelination during the resolution phase of the infection. Collectively, these results suggest that the pathogenic processes that result in demyelination are initiated early during infection and that they can be diminished by exogenous IL-10 delivered soon after disease onset. IL-10 functions by dampening the innate or very early T cell immune response. Further, they suggest that early treatment with IL-10 may be useful adjunct therapy in some types of viral encephalitis.