Developmentally regulated GTP-binding protein 2 (DRG2) represents a novel subclass of GTP-binding proteins. We here report that transgenic overexpression of DRG2 in mice ameliorates experimental autoimmune encephalomyelitis (EAE), a murine model of multiple sclerosis (MS). The protective effect of DRG2 in EAE was mediated by the inhibition of the development of TH17 cells. DRG2 enhanced the activity of PPAR, which led to an inhibition of the nuclear factor kappa B (NF-B) activity and IL-6 production in antigen presenting cells and an inhibition of the development of TH17 cells. Our results demonstrate that DRG2 is an essential modulator of EAE.