In its natural murine host, infection with Theiler's murine encephalomyelitis virus (TMEV) produces a chronic, progressive demyelinating disease. To help elucidate the role of host immune mechanisms involved in demyelination, we studied TMEV infection in Nude mice. These animals demonstrated rising titers of infectious virus within the central nervous system and failed to produce anti-TMEV antibody. Neurologic signs including the development of severe hind limb paralysis were evident approximately 2 weeks postinfection with most animals succumbing within the first month. Immunoperoxidase studies demonstrated viral antigen in the cytoplasm of neurons and glial cells for the entire period of observation. Plaques of demyelination associated with scanty inflammatory infiltrates were present in the spinal cord by 14 days postinfection. Electron microscopic studies of the involved white matter revealed numerous degenerating glial cells, many of which contained paracrystalline arrays of picornavirus within their cytoplasm. Some of the infected glial cells were identified as oligodendrocytes by demonstrating their myelin-plasma membrane connections. The studies indicate that in Nude mice TMEV causes a lytic infection of oligodendrocytes producing demyelination independent of the T lymphocyte immune system.