Lewis rats with experimental allergic encephalomyelitis (EAE), induced either by the subcutaneous injection of guinea pig myelin basic protein (MBP) or by the adoptive transfer of MBP-primed spleen cells, suffer from a single episode of paralysis from which they recover spontaneously. Animals developing EAE were found to have greatly elevated levels of corticosterone in the blood. This endogenous increase in steroid production was accompanied by lymphopenia and depressed delayed-type hypersensitivity responses to OVA, indicating that rats with EAE are immunosuppressed in an antigen-nonspecific fashion. Adrenalectomized rats given subcutaneous implants of corticosterone to maintain basal steroid levels invariably died when EAE was induced. However, if the steroid replacement therapy was adjusted to mimic the hormone levels that were observed in intact rats developing EAE, then the disease followed a nonfatal course closely resembling that seen in the nonadrenalectomized controls. Replacement therapy that achieved serum corticosterone levels slightly higher than those found in intact rats with EAE virtually suppressed the disease completely. It is concluded that endogenous corticosterone release in rats with EAE plays an essential role in the spontaneous recovery that is observed in this condition. However, the subsequent refractory phase that is characteristic of rats that have recovered from EAE induced by active immunization with MBP is not associated with chronically elevated corticosterone levels. This finding is discussed in the light of other data that suggest that unlike the spontaneous recovery, the refractory state has an immunological basis rather than an endocrinological basis.