The DA strain and other members of the TO subgroup of Theiler's murine encephalomyelitis virus (TMEV) induce a chronic demyelinating disease with a restricted virus expression. This disease serves as an experimental model of multiple sclerosis; in both diseases the immune system contributes to a similar demyelinating pathology. Like all picornaviruses, TMEV encodes a polyprotein translated from one long open reading frame. The polyprotein is then processed into structural and non-structural viral proteins. Here, we demonstrate that the DA strain of TMEV has an additional alternative open reading frame that encodes a protein called L* that is present in infected cells. Virus with a mutation of L* has a dramatically decreased demyelinating activity, indicating that L* plays a critical role in TO subgroup-induced demyelinating disease. L* is associated with membranes, suggesting that L* may interact with the immune system and thereby mediate the viral-induced demyelinating disease.