To examine the role of tumor necrosis factor (TNF)-α in the pathogenesis of degenerative disorders of the central nervous system (CNS), transgenic mice were developed in which expression of murine TNF-α was targeted to astrocytes using a glial fibrillary acidic protein (GFAP)-TNF-α fusion gene. In two independent GFAP-TNFα transgenic lines (termed GT-8 or GT-2) adult (>4 months of age) animals developed a progressive ataxia (GT-8) or total paralysis affecting the lower body (GT-2). Symptomatic mice had prominent meningoencephalitis (GT-8) or encephalomyelitis (GT-2) in which large numbers of B cells and CD4⁺ and CD8⁺ T cells accumulated at predominantly perivascular sites. The majority of these lymphocytes displayed a memory cell phenotype (CD44^high, CD62L^low, CD25⁻) and expressed an early activation marker (CD69). Parenchymal lesions contained mostly CD45⁺ high, MHC class II⁺, and Mac-1⁺ cells of the macrophage microglial lineage with lower numbers of neutrophils and few CD4⁺ and CD8⁺ T cells. Cerebral expression of the cellular adhesion molecules ICAM-1, VCAM-1, and MAdCAM as well as a number of α- and β-chemokines was induced or up-regulated and preceded the development of inflammation, suggesting an important signaling role for these molecules in the CNS leukocyte migration. Degenerative changes in the CNS of the GFAP-TNFα mice paralleled the development of the inflammatory lesions and included primary and secondary demyelination and neurodegeneration. Disease exacerbation with more extensive inflammatory lesions that contained activated cells of the macrophage/microglial lineage occurred in GFAP-TNFα mice with severe combined immune deficiency. Thus, persistent astrocyte expression of murine TNF-α in the CNS induces a late-onset chronic inflammatory encephalopathy in which macrophage/microglial cells but not lymphocytes play a central role in mediating injury.