Infection of the central nervous system (CNS) by the neurotropic JHM strain of mouse hepatitis virus (JHMV) induces an acute encephalomyelitis associated with demyelination. To examine the anti-viral and/or regulatory role of interferon-γ (IFN-γ) signaling in the cell that synthesizes and maintains the myelin sheath, we analyzed JHMV pathogenesis in transgenic mice expressing a dominant-negative IFN-γ receptor on oligodendroglia. Defective IFN-γ signaling was associated with enhanced oligodendroglial tropism and delayed virus clearance. However, the CNS inflammatory cell composition and CD8⁺ T-cell effector functions were similar between transgenic and wild-type mice, supporting unimpaired peripheral and CNS immune responses in transgenic mice. Surprisingly, increased viral load in oligodendroglia did not affect the extent of myelin loss, the frequency of oligodendroglial apoptosis, or CNS recruitment of macrophages. These data demonstrate that IFN-γ receptor signaling is critical for the control of JHMV replication in oligodendroglia. In addition, the absence of a correlation between increased oligodendroglial infection and the extent of demyelination suggests a complex pathobiology of myelin loss in which infection of oligodendroglia is required but not sufficient.