CD24 is a cell surface glycoprotein that is expressed on both immune cells and cells of the CNS. We have previously shown that CD24 is required for the induction of experimental autoimmune encephalomyelitis (EAE), an experimental model for the human disease multiple sclerosis (MS). The development of EAE requires CD24 expression on both T cells and non-T host cells in the CNS. To understand the role of CD24 on the resident cells in the CNS during EAE development, we created CD24 bone marrow chimeras and transgenic mice in which CD24 expression was under the control of a glial fibrillary acidic protein promotor (AstroCD24TG mice). We showed that mice lacking CD24 expression on the CNS resident cells developed a mild form of EAE; in contrast, mice with overexpression of CD24 in the CNS developed severe EAE. Compared with nontransgenic mice, the CNS of AstroCD24TG mice had higher expression of cytokine genes such as IL-17 and demyelination-associated marker P8; the CNS of AstroCD24TG mice accumulated higher numbers of Th17 and total CD4+ T cells, whereas CD4+ T cells underwent more proliferation during EAE development. Expression of CD24 in CD24-deficient astrocytes also enhanced their costimulatory activity to myelin oligodendrocyte glycoprotein-specific, TCR-transgenic 2D2 T cells. Thus, CD24 on the resident cells in the CNS enhances EAE development via costimulation of encephalitogenic T cells. Because CD24 is increased drastically on resident cells in the CNS during EAE, our data have important implications for CD24-targeted therapy of MS.