In recent years, there has been increasing evidence that soluble mediators such as cytokines from activated T lymphocytes and macrophages are able to modulate the growth and function of cells found within the central nervous system (CNS), specifically macroglia and microglia cells. Furthermore, glial cells, upon activation, can secrete immunoregulatory factors that influence lymphoid/mononuclear cells as well as the glial cells themselves. Thus the potential exists for bidirectional communication between lymphoid cells and glial cells within the CNS, which in part is mediated via cytokines. This review describes various neurological disease states in which both immune and glial cells may contribute to inflammation and immunologic events occurring in the CNS. The mechanisms by which glial cells both respond to and synthesize a variety of cytokines within the CNS and the capacity of glial cells to acquire major histocompatibility complex antigens and function as antigen-presenting cells within the CNS are described in detail. The implications of these functions, cytokine secretion and antigen presentation, by glial cells are discussed with respect to neurological diseases associated with autoimmunity and/or inflammation.