The central nervous system is an immune privileged organ in which inflammatory reactions are normally downregulated by mechanisms that are not completely understood. Transforming growth factor (TGF)-β2 is constitutively expressed in the adult central nervous system and little is known about its regulation and modulatory role during neuroinflammation. In this study, we show that TGFβ2 mRNA and protein are downregulated in the acute phase of chronic relapsing experimental autoimmune encephalomyelitis, whereas the homologous cytokine TGFβ1 is upregulated. To further characterize regulatory mechanisms, we resorted to an in vitro glial cell culture system. The proinflammatory cytokines IFNγ and TNFα suppressed TGFβ2 secretion by astrocytes, the major intracerebral producers of TGFβ2. On the cellular level, activated microglia inhibited TGFβ2 secretion but induced TGFβ1 through soluble factors. On the other hand, TGFβ2 influenced antigen-presenting cell functions of microglia by downregulating major histocompatibility complex class II expression and costimulatory/adhesion molecules, and thereby inhibited myelin basic protein-specific T cell proliferation. These data suggest that TGFβ2 plays a central role in maintenance of the immune privilege of the central nervous system. Downregulation of astrocytic TGFβ2 by T cell- and microglia-secreted cytokines appears to be a critical step in providing the grounds for acute and chronic neuroinflammation.