The extensive literature and the work from our laboratory illustrate the large number of complex processes affected by estrogen that might contribute to the striking ability of 17-β estradiol (E2) and its derivatives to inhibit clinical and histological signs of experimental autoimmune encephalomyelitis (EAE) in mice. These effects require sustained exposure to relatively low doses of exogenous hormone and offer better protection when initiated prior to induction of EAE. The E2 mediates inhibition of encephalitogenic T cells, inhibition of cell migration into central nervous system tissue, and neuroprotective effects that promote axon and myelin survival. E2 effects on EAE are mediated through Esr-1 (α receptor for E2) but not Esr-2 (β receptor for E2), as are its anti-inflammatory and neuroprotective effects. A novel finding is that E2 upregulated the expression of FoxP3 that contributes to the activity of CD4 + CD25 + T regulatory cells (Treg). The protective effects of E2 in EAE suggest its use as a therapy for multiple sclerosis (MS). Possible risks may be minimized by using sub-pregnancy levels of exogenous E2 that produced synergistic effects when used in combination with another immunoregulatory therapy. Alternatively, one might envision using E2 derivatives alone or in combination therapies in both male and female MS patients.