Borna disease represents a unique model of a virus-induced immunological disease of the brain. Naturally occurring in horses and sheep, the mechanisms of pathogenesis have been studied in experimental animals, namely in the rat. Many investigations have revealed that the infection of the natural hosts principally follows the same pathogenic pathways as observed in rats, leading to a severe encephalomyelitis. This affliction of the central nervous system results in severe neurological disorders that again, are fully comparable in laboratory animals to those in the natural and the different experimental hosts. In addition, alterations have been reported which are also based on the infection of the brain and do not result in the classical encephalitic clinical picture but rather in alterations of behavior. However, to all of our knowledge, the various clinical pictures of Borna disease are not caused by the infecting virus itself but rather by the hosts immune response towards it, i.e. by a virus-induced cell-mediated immunopathological reaction. The importance of virus-specific CD4+ T cells as exemplified by a cultured T cell line and of CD8+ T cells as shown by immunomodulatory substances and specific antibody treatment in vivo for the pathogenesis of acute Borna disease will be elucidated here. In addition, evidence will be provided that virus-specific CD8+ T cells are also responsible for the dramatic brain atrophy in the chronic phase of the disease in rats. Therefore, Borna disease not only lends itself exquisitely well to the study of the pathogenesis of an immunopathological disease of the brain but also represents one of the few models for immune-mediated tissue destruction that eventually leads to brain atrophy and clinically to dementia.