The protein tyrosine phosphatase SHP-1 is a crucial negative regulator of cytokine signaling and inflammatory gene expression, both in the immune system and in the central nervous system (CNS). Mice genetically lacking SHP-1 (me/me) display severe inflammatory demyelinating disease following inoculation with the Theiler's murine encephalomyelitis virus (TMEV) compared to infected wild-type mice. Therefore, it became essential to investigate the mechanisms of TMEV-induced inflammation in the CNS of SHP-1-deficient mice. Herein, we show that the expression of several genes relevant to inflammatory demyelination in the CNS of infected me/me mice is elevated compared to that in wild-type mice. Furthermore, SHP-1 deficiency led to an abundant and exclusive increase in the infiltration of high-level-CD45-expressing (CD45 hi ) CD11b Multiple sclerosis (MS) is a chronic inflammatory demyelinating disease of the central nervous system (CNS) that remains a major cause of disability (76). Several studies demonstrated that MS lesions contain multiple leukocyte cell types, including lymphocytes, macrophages, and dendritic cells, all of which are believed to contribute to lesion formation by various distinct and interacting mechanisms (54, 61). Among these leukocyte subsets, infiltrating macrophages have been identified as major effectors of demyelination in both MS and animal models for MS (17,44,59,102). In accord with these studies, it was recently reported that the dominant mechanism of demyelination in MS is macrophage mediated (15). Indeed, in some models for MS, the requirement for lymphocytes is negligible and macrophages are the sole mediators of demyelination (6, 72).These findings have stimulated intense interest in the function of macrophages in lesion formation, including signaling events that draw these cells into the CNS white matter and trigger the effector mechanisms by which these cells damage myelin. For instance, macrophages have been identified as the major responders to CNS chemokines and producers of a number of proinflammatory cytokines, chemokines, and toxic molecules known to promote demyelination (32,44,63,85,90,91,93,103). Interestingly, both the brains of MS patients and the brains of experimental animals with MS-like diseases contain activated transcription factors like NF-B (34, 40), STAT1 (35,37,40), and STAT6 (18,21,109), which can lead to enhanced expression of these inflammatory molecules. Based on the findings of our previous work, we propose that the modulation of inflammatory signaling via these transcriptional pathways may be deficient in the leukocytes, including the macrophages, of MS patients and that this deficiency is responsible for susceptibility to inflammatory demyelinating processes within the CNS.SHP-1 is a protein tyrosine phosphatase with two Src homology 2 domains which acts as a negative regulator of both innate and acquired immune cytokine signaling via NF-B (52, 67), STAT1 (29,68), and STAT6 (13,43,45,50). Mice genetically lacking SHP-1 (motheaten mice) display myelin de...