Abstract Multiple sclerosis (MS) is an inflammatory, demyelinating disease of the central nervous system, and among all the genes associated with MS, HLA class II genes have the highest relative risk. Although IL-17A is thought to be a major cytokine in the pathogenesis of MS, the exact role of IL-17A in the MS is still poorly understood. Specifically, it is unclear whether IL-17A is required for disease initiation or disease severity or in both. Therefore, in the present study, utilizing HLA-DR3 transgenic mice lacking IL-17A (HLA-DR3.IL-17A−/−), we investigated the importance of IL-17A in disease development and progression in experimental autoimmune encephalomnyelitis (EAE) an animal model of MS. We observed that HLA-DR3.IL-17A−/− mice had a higher frequency of CD4+CD25+FoxP3+ regulatory T cells (Treg)s and developed milder EAE compared to IL-17 sufficient HLA-DR3 mice. Further characterization of mechanism identified a novel role of IL-17A in regulating the disease progression through modulation of immunoregulatory responses. We also identified an important role of gut microbiota in IL-17A dependent disease regulation specifically depletion of gut bacteria with ability to promote Treg population in IL-17A sufficient HLA-DR3 mice. Fecal transplantation of HLA.DR3 mice with HLA-DR3. IL17A−/− showed milder EAE and an increase in Treg cells in HLA-DR3 mice confirming a role of gut microbiota in shaping Treg repertoire and function. Additionally, we observed higher frequency of metabolic pathway involved with Treg promoting short chain fatty acid (SCFA) metabolism in HLA-DR3.IL17A−/− mice. Thus our study shows a novel role of IL-17A in immune homeostasis and inflammation by regulating levels of Tregs through modulation of gut microbiota.