It is unclear whether TGF-beta, a critical differentiation factor for T cells producing interleukin 17 (T(H)-17 cells), is required for the initiation of experimental autoimmune encephalomyelitis (EAE) in vivo. Here we show that mice whose T cells cannot respond to TGF-beta signaling lack T(H)-17 cells and do not develop EAE despite the presence of T helper cell type 1 infiltrates in the spinal cord. Local but not systemic antibody blockade of TGF-beta prevented T(H)-17 cell differentiation and the onset of EAE. The pathogen stimulus zymosan, like mycobacterium, induced T(H)-17 cells and initiated EAE, but the disease was transient and correlated with reduced production of interleukin 23. These data show that TGF-beta is essential for the initiation of EAE and suggest that disease progression may require ongoing chronic inflammation and production of interleukin 23.