Theiler's murine encephalomyelitis virus-induced demyelinating disease (TMEV-IDD) is a well-characterized murine model of the chronic-progressive form of human multiple sclerosis (MS) characterized by the activation of myelin-specific autoreactive CD4 Th1 cells via epitope spreading. To gain an understanding of the potential role of central nervous system (CNS)-resident cells in the presentation of endogenous myelin epitopes, we determined the individual antigen presentation and effector potential of resident microglia vs. infiltrating macrophages in the CNS of mice with ongoing TMEV-IDD by performing functional analysis of these populations separated to high purity by flow cytometric sorting based on their level of CD45 expression. Unlike microglia from nai;ve mice, peptide-pulsed CD45(lo) microglia isolated at the onset of clinical disease were as efficient as CNS-infiltrating CD45(hi) macrophages in activating proliferation and IFN-gamma production by myelin-peptide specific Th1 cells. In contrast, during the chronic stages of TMEV-IDD, CNS-infiltrating macrophages were more highly activated than the resident microglia as reflected both by higher expression of cell surface molecules associated with APC function and enhanced functional ability of spinal cord-infiltrating macrophages to stimulate T cell proliferation in vitro. Interestingly, both microglia and infiltrating macrophages expressed similar profiles of effector molecules such as IL-1, IL-6, IL-12 p40, TNF-alpha, and iNOS. Collectively, this is the first report comparing the antigen-presenting phenotype and function of microglia and infiltrating macrophages in a virus-induced model of CNS demyelination demonstrating that the resident microglia are capable APCs and may play an important role in antigen presentation at the onset of clinical disease and contribute to effector myelin destruction.