Astrocytes may serve as effectual APCs for T cell-mediated immune responses to myelin components during multiple sclerosis and experimental autoimmune encephalomyelitis (EAE). Although astrocytes have been reported not to constitutively express MHC class II molecules, expression is up-regulated during active EAE and by in vitro incubation with IFN-gamma. Previous studies have reported that cytokine-activated astrocytes are able to activate Ag-specific previously activated T cells, but not naive alloreactive T cells. In the current study, we show that a subset of primary murine astrocytes constitutively expresses B7-2 molecules, as determined by FACS and PCR analyses, and up-regulates surface expression and mRNA levels of both B7-2 and B7-1 upon IFN-gamma stimulation. In contrast to earlier reports, we found that both untreated and IFN-gamma-treated astrocytes were able to stimulate proliferation of previously activated OVA-specific Th1 cells. In contrast, only IFN-gamma-treated astrocytes activated naive, transgenic OVA-specific T cells. Astrocyte-induced activation of both OVA-specific naive T cells and activated Th1 cells was dependent primarily on B7-2-mediated costimulation, as proliferation was inhibited by CTLA4-Ig and by anti-B7-2 mAbs. These results suggest that astrocytes in an inflammatory environment have the capacity to express the required MHC class II and B7 costimulatory molecules necessary for efficient activation of naive T cells. Since we have shown that T cells specific for endogenous myelin epitopes released during acute EAE play the major pathologic effector role in subsequent disease relapses (epitope spreading), astrocytes could play a role in the local activation and expansion of these responses.