Borna disease virus (BDV) frequently causes meningoencephalitis and fatal neurological disease in young but not old mice of strain MRL. Disease does not result from the virus-induced destruction of infected neurons. Rather, it is mediated by H-2(k)-restricted antiviral CD8 T cells that recognize a peptide derived from the BDV nucleoprotein N. Persistent BDV infection in mice is not spontaneously cleared. We report here that N-specific vaccination can protect wild-type MRL mice but not mutant MRL mice lacking gamma interferon (IFN-gamma) from persistent infection with BDV. Furthermore, we observed a significant degree of resistance of old MRL mice to persistent BDV infection that depended on the presence of CD8 T cells. We found that virus initially infected hippocampal neurons around 2 weeks after intracerebral infection but was eventually cleared in most wild-type MRL mice. Unexpectedly, young as well as old IFN-gamma-deficient MRL mice were completely susceptible to infection with BDV. Moreover, neurons in the CA1 region of the hippocampus were severely damaged in most diseased IFN-gamma-deficient mice but not in wild-type mice. Furthermore, large numbers of eosinophils were present in the inflamed brains of IFN-gamma-deficient mice but not in those of wild-type mice, presumably because of increased intracerebral synthesis of interleukin-13 and the chemokines CCL1 and CCL11, which can attract eosinophils. These results demonstrate that IFN-gamma plays a central role in host resistance against infection of the central nervous system with BDV and in clearance of BDV from neurons. They further indicate that IFN-gamma may function as a neuroprotective factor that can limit the loss of neurons in the course of antiviral immune responses in the brain.