We demonstrate the absolute requirement for a functioning class II-restricted Ag processing pathway in the CNS for the initiation of experimental autoimmune encephalomyelitis (EAE). C57BL/6 (B6) mice deficient for the class II transactivator, which have defects in MHC class II, invariant chain (Ii), and H-2M (DM) expression, are resistant to initiation of myelin oligodendrocyte protein (MOG) peptide, MOG(35-55)-specific EAE by both priming and adoptive transfer of encephalitogenic T cells. However, class II transactivator-deficient mice can prime a suboptimal myelin-specific CD4(+) Th1 response. Further, B6 mice individually deficient for Ii and DM are also resistant to initiation of both active and adoptive EAE. Although both Ii-deficient and DM-deficient APCs can present MOG peptide to CD4(+) T cells, neither is capable of processing and presenting the encephalitogenic peptide of intact MOG protein. This phenotype is not Ag-specific, as DM- and Ii-deficient mice are also resistant to initiation of EAE by proteolipid protein peptide PLP(178-191). Remarkably, DM-deficient mice can prime a potent peripheral Th1 response to MOG(35-55), comparable to the response seen in wild-type mice, yet maintain resistance to EAE initiation. Most striking is the demonstration that T cells from MOG(35-55)-primed DM knockout mice can adoptively transfer EAE to wild-type, but not DM-deficient, mice. Together, these data demonstrate that the inability to process antigenic peptide from intact myelin protein results in resistance to EAE and that de novo processing and presentation of myelin Ags in the CNS is absolutely required for the initiation of autoimmune demyelinating disease.