Interleukin 17 (IL-17) is a signature cytokine of Th17 cells. We previously reported that deletion of NF-κB activator 1 (Act1), the key transducer of IL-17 receptor signaling, from the neuroectodermal lineage in mice (neurons, oligodendrocytes and astrocytes) results in attenuated severity of experimental autoimmune encephalomyelitis (EAE). Here we examined the cellular basis of this observation. EAE disease course was unaffected by deletion of Act1 in neurons or mature oligodendrocytes, and Act1 deletion in astrocytes only modestly affected disease course. Deletion of Act1 in NG2(+) glia resulted in markedly reduced EAE severity. Furthermore, IL-17 induced characteristic inflammatory mediator expression in NG2(+) glial cells. IL-17 also exhibited strong inhibitory effects on the maturation of oligodendrocyte lineage cells in vitro and reduced their survival. These data identify NG2(+) glia as the major CNS cellular target of IL-17 in EAE. The sensitivity of oligodendrocyte lineage cells to IL-17-mediated toxicity further suggests a direct link between inflammation and neurodegeneration in multiple sclerosis.