Microglia are resident central nervous system (CNS) macrophages. Theiler's murine encephalomyelitis virus (TMEV) infection of SJL/J mice causes persistent infection of CNS microglia, leading to the development of a chronic-progressive CD4+ T-cell-mediated autoimmune demyelinating disease. We asked if TMEV infection of microglia activates their innate immune functions and/or activates their ability to serve as antigen-presenting cells for activation of T-cell responses to virus and endogenous myelin epitopes. The results indicate that microglia lines can be persistently infected with TMEV and that infection significantly upregulates the expression of cytokines involved in innate immunity (tumor necrosis factor alpha, interleukin-6 [IL-6], IL-18, and, most importantly, type I interferons) along with upregulation of major histocompatibility complex class II, IL-12, and various costimulatory molecules (B7-1, B7-2, CD40, and ICAM-1). Most significantly, TMEV-infected microglia were able to efficiently process and present both endogenous virus epitopes and exogenous myelin epitopes to inflammatory CD4+ Th1 cells. Thus, TMEV infection of microglia activates these cells to initiate an innate immune response which may lead to the activation of naive and memory virus- and myelin-specific adaptive immune responses within the CNS.