Multiple sclerosis (MS) is characterized by autoimmune inflammation and subsequent neurodegeneration. It is believed that early in the disease course, proinflammatory T cells that are activated in the periphery by antigen presentation cross the blood-brain barrier (BBB) into the CNS directed by various chemotaxic agents. However, to date, there has been no formal demonstration of a specific precipitating antigen. Once inside the CNS, activated T cells including T helper-1 (T(h)1), T(h)17, γδ and CD8+ types are believed to secrete proinflammatory cytokines. Decreased levels of T(h)2 cells also correlate with relapses and disease progression in MS, since T(h)2-derived cytokines are predominantly anti-inflammatory. In healthy tissue, inflammatory effects are opposed by specific subsets of regulatory T cells (T(regs)) including CD4+, CD25+ and FoxP3+ cells that have the ability to downregulate the activity of proinflammatory T cells, allowing repair and recovery to generally follow inflammatory insult. Given their function, the pathogenesis of MS most likely involves deficits of T(reg) function, which allow autoimmune inflammation and resultant neurodegeneration to proceed relatively unchecked. Interferons (IFNs) are naturally occurring cytokines possessing a wide range of anti-inflammatory properties. Recombinant forms of IFNβ are widely used as first-line treatment in relapsing forms of MS. The mechanism of action of IFNβ is complex, involving effects at multiple levels of cellular function. IFNβ appears to directly increase expression and concentration of anti-inflammatory agents while downregulating the expression of proinflammatory cytokines. IFNβ treatment may reduce the trafficking of inflammatory cells across the BBB and increase nerve growth factor production, leading to a potential increase in neuronal survival and repair. IFNβ can also increase the number of CD56bright natural killer cells in the peripheral blood. These cells are efficient producers of anti-inflammatory mediators, and may have the ability to curb neuron inflammation. The mechanistic effects of IFNβ manifest clinically as reduced MRI lesion activity, reduced brain atrophy, increased time to reach clinically definite MS after the onset of neurological symptoms, decreased relapse rate and reduced risk of sustained disability progression. The mechanism of action of IFNβ in MS is multifactorial and incompletely understood. Ongoing and future studies will increase our understanding of the actions of IFNβ on the immune system and the CNS, which will in turn aid advances in the management of MS.