In inflammation-associated progressive neuroinflammatory disorders, such as multiple sclerosis (MS), inflammatory infiltrates containing T helper 1 (TH1) and TH17 cells cause demyelination and neuronal degeneration. Regulatory T cells (Treg) control the activation and infiltration of autoreactive T cells into the central nervous system (CNS). In MS and experimental autoimmune encephalomyelitis (EAE) in mice, Treg function is impaired. We show that a recently approved drug, Nle4-D-Phe7–α-melanocyte–stimulating hormone (NDP-MSH), induced functional Treg, resulting in amelioration of EAE progression in mice. NDP-MSH also prevented immune cell infiltration into the CNS by restoring the integrity of the blood-brain barrier. NDP-MSH exerted long-lasting neuroprotective effects in mice with EAE and prevented excitotoxic death and reestablished action potential firing in mouse and human neurons in vitro. Neuroprotection by NDP-MSH was mediated via signaling through the melanocortin-1 and orphan nuclear 4 receptors in mouse and human neurons. NDP-MSH may be of benefit in treating neuroinflammatory diseases such as relapsing-remitting MS and related disorders.