IFN-beta has been shown to be effective in the treatment of multiple sclerosis (MS). However, the primary mechanism by which IFN-beta mediates its therapeutic effect remains unclear. Recent studies indicate that under defined conditions, IFN-beta may downregulate DC expression of IL-12. We and others have shown that IFN-beta may also downregulate IL-10. In light of the recently proposed paradigm that an IL-10/IL-12 immunoregulatory circuit controls susceptibility to autoimmune disease, we examined the effect of IFN-beta on the development and behavior of the autoreactive T cell repertoire during experimental autoimmune encephalomyelitis (EAE), an animal model sharing many features with MS. SWXJ mice were immunized with the immunodominant p139-151 determinant of myelin proteolipid protein (PLP), and at onset of EAE were treated every other day with IFN-beta. After eight weeks of treatment, we assessed autoreactivity and observed no significant IFN-beta effect on splenocyte proliferation or splenocyte production of IFN-gamma, IL-2, IL-4, or IL-5 in response to the priming determinant used to initiate disease. However, in IFN-beta treated mice, the cytokine profile in response to the priming immunogen was significantly skewed toward an increased production of IL-10 and a concurrent decreased production of IL-12. Moreover, the in vivo modulation of the IL-10/IL-12 immunoregulatory circuit in response to the priming immunogen was accompanied by an aborted development of epitope spreading. Our results indicate that IFN-beta induces a reciprocal modulation of the IL-10/IL-12 cytokine circuit in vivo. This skewed autoreactivity establishes an inflammatory microenvironment that effectively prevents endogenous self-priming thereby inhibiting the progression of disease associated with epitope spreading.