ABSTRACTWe previously characterized the expression and function of the protein tyrosine phosphatase SHP-1 in the glia of the central nervous system (CNS). In the present study, we describe the role of SHP-1 in virus infection of glia and virus-induced demyelination in the CNS. For in vivo studies, SHP-1-deficient mice and their normal littermates received an intracerebral inoculation of an attenuated strain of Theiler's murine encephalomyelitis virus (TMEV). At various times after infection, virus replication, TMEV antigen expression, and demyelination were monitored. It was found that the CNS of SHP-1-deficient mice uniquely displayed demyelination and contained substantially higher levels of virus than did that of normal littermate mice. Many infected astrocytes and oligodendrocytes were detected in both brains and spinal cords of SHP-1-deficient but not normal littermate mice, showing that the virus replicated and spread at a much higher rate in the glia of SHP-1-deficient animals. To ascertain whether the lack of SHP-1 in the glia was primarily responsible for these differences, glial samples from these mice were cultured in vitro and infected with TMEV. As in vivo, infected astrocytes and oligodendrocytes of SHP-1-deficient mice were much more numerous and produced more virus than did those of normal littermate mice. These findings indicate that SHP-1 is a critical factor in controlling virus replication in the CNS glia and virus-induced demyelination.