Interferon-tau (IFN-tau) is a type I IFN originally discovered for its role as a pregnancy recognition hormone in ruminant animals such as sheep and cows. IFN-tau possesses all of the biological properties ascribed to the other type I IFNs including antiviral, antiproliferative and immunomodulatory activities. However, IFN-tau differs in that it is relatively nontoxic to cells at high concentrations as compared to the toxicity normally associated with IFNs-alpha and -beta and the type II IFN, IFN-gamma. IFN-tau was examined for its ability to prevent the development of experimental allergic encephalomyelitis (EAE), an animal model for multiple sclerosis (MS), in humans. IFN-tau prevents development of EAE as effectively as IFN-beta, a type I IFN currently being used for the treatment of MS. Unlike IFN-beta, however, IFN-tau treated mice did not develop leucopenia or experience bodyweight loss indicative of toxicity. Superantigens can induce relapses in EAE, similar to those that are observed in patients with relapsing-remitting MS; IFN-tau blocks superantigen reactivation of EAE. The inhibitory effect of IFN-tau on induction of EAE and reactivation by superantigen involves suppression of myelin basic protein and superantigen activation of T cells as well as suppressed induction of inflammatory cytokines such as tumour necrosis factor-alpha. In addition, IFN-tau has been shown to reduce immunologically mediated spontaneous fetal resorption. Thus, IFN-tau has considerable potential for treatment of autoimmune and immunologically mediated disorders, including MS.