Adult male Sprague-Dawley rats were injected intraspinally with 2 microL of 1% lysolecithin to induce demyelination. This was followed by systemic treatment with dexamethasone acetate for two weeks. Control groups were injected with lysolecithin but not treated. The animals were perfused at 8, 12, 28, and 60 days postoperatively, and the spinal cords were processed and examined histopathologically. The intraspinal injection of lysolecithin produced a focal area of primary demyelination followed by remyelination. In the steroid-treated groups, there was a suppression of the mononuclear phagocytic response, accompanied by slow clearance of the disrupted myelin sheaths and an apparent reduction in lesion size. Remyelination was substantially retarded in comparison with the controls. The findings suggest that steroids interfere with the process of remyelination, as they are known to do with myelination during development. Thus, dexamethasone appears to have a dual effect, decreasing demyelination but delaying remyelination.