A major question relevant to the initiation and progression of inflammation and autoimmune processes within the central nervous system (CNS) is whether resident microglia or only infiltrating macrophage can productively interact with T-cells that enter the CNS either actively through extravasation or passively through defects in the blood brain barrier (BBB). We isolated microglia and macrophage from the brains of healthy adult mice and transgenic mice that displayed many features of multiple sclerosis and HIV leukoencephalopathy due to the astrocytic expression of interleukin (IL)-3 and compared their antigen-presenting cell (APC) functions. We found that unactivated microglia isolated from healthy nontransgenic mice and activated microglia isolated from transgenic siblings are relatively weak stimulators of naive T-cell proliferation compared to macrophage populations. The APC function of activated, but not unactivated, microglia could be increased by treatment acutely with lipopolysaccharide (LPS)/interferon gamma (IFN-gamma). However, this treatment also induced the apparent production of prostaglandins, which reduced T-cell proliferation when indomethacin was absent from the assay cultures. Strikingly, even in the absence of stimulated T-cell proliferation, both unactivated and activated microglia stimulated the differentiation of naive T-cells into Th1 effector cells, although neither microglial population was a more effective inducer than macrophages or splenic APCs. Thus, while microglia are clearly capable of productively interacting with naive T-cells, macrophages have a more robust APC function.