Apolipoprotein E (apoE), well known to play a role in lipid transport and cholesterol metabolism, also exerts anti-inflammatory and neuroprotective effects in the central nervous system. Recent clinical and genetic studies display an association between apoE genotype (APOE) and the progression and severity of multiple sclerosis, raising the possibility that modulation of apoE may be a novel treatment for multiple sclerosis. Using a murine experimental autoimmune encephalomyelitis (EAE) model of human multiple sclerosis, we found that a peptidomimetic of apoE protein, COG133, substantially reduces the clinical symptoms of EAE and promotes remission from the disability when administered before or after onset of disease. Most notably, fusion of COG133 to a protein transduction domain creates COG112, a modified apoE-mimetic peptide with significantly enhanced anti-inflammatory bioactivities in vitro, and improved therapeutic effects on EAE in vivo, which renders a nearly full remission from the disability. Histopathological analysis showed that COG112 and COG133 attenuated demyelination and significantly diminished the number of peripheral cells infiltrating into the spinal cord. ApoE mimetics also interfered with several mechanisms relevant to the pathogenesis of EAE and multiple sclerosis, including activation of macrophages, subsequent production of nitric oxide and inflammatory cytokines, and lymphocyte proliferation. These data suggest that apoE mimetics represent a multidimensional therapeutic for multiple sclerosis capable of inhibiting the inflammatory cascade, modulating immune cell function, and reducing clinical signs, which may have novel utility for the treatment of inflammatory autoimmune diseases.