This invention pertains to the discovery that nerve growth factor (NGF) is capable of preventing further demyelination of nervous tissue in pathologies characterized by the demyelination of nervous tissue (e.g. multiple sclerosis). In one embodiment, this invention provides a method for inhibiting demyelination in a subject having an inflammatory disease of a nervous tissue. The method involves administering an effective amount of NGF, an NGF analogue, or an active fragment of NGF where the effective amount is sufficient to downregulate the production of interferon .lamda. by T cells infiltrating the central nervous system and/or to upregulate IL-10 production by glial cells.