In inflammatory demyelinating diseases such as multiple sclerosis and experimental allergic encephalomyelitis, myelin destruction occurs in the vicinity of infiltrating mononuclear cells. The observations that myelin can be altered prior to phagocytosis and in areas not contiguous with inflammatory cells suggests a common mechanism for the initial stages of demyelination. Because stimulated macrophages secrete several neutral proteases, including plasminogen activator, we have investigated the possibility that myelinolysis could be mediated directly or indirectly by these enzymes. Isolated myelin was incubated with conditioned media from cultures of thioglycollate-stimulated mouse peritoneal macrophages in the presence and absence of plasminogen. Myelin appeared to be vulnerable to attack by at least two proteolytic activities secreted by the macrophages, a plasminogen-dependent and a plasminogen-independent activity; of the major proteins in myelin, the basic protein was most susceptible. The direct myelinolytic activity of macrophage-conditioned media was abolished by EDTA, and the plasminogen-dependent hydrolysis was abolished by p-nitrophenylguanidinobenzoate, an inhibitor of plasminogen activator and plasmin. These results suggest that the plasminogen activator released by the stimulated macrophages generated plasmin which hydrolyzed basic protein in intact myelin. This interpretation was confirmed by the observation that urokinase, a plasminogen activator, in the presence of plasminogen brought about marked degradation of basic protein in myelin. We propose that the release of neutral proteases by stimulated macrophages involved in cell-mediated reactions, and its amplification by the plasminogen-plasmin system, may play a significant role in the demyelination observed in several inflammatory demyelinating diseases.