During central nervous system autoimmunity, interactions between infiltrating immune cells and brain-resident cells are critical for disease progression and ultimately organ damage. Here, we demonstrate that local cross-talk between invading autoreactive T cells and auto-antigen-presenting myeloid cells within the central nervous system results in myeloid cell activation, which is crucial for disease progression during experimental autoimmune encephalomyelitis, the animal model of multiple sclerosis. This T cell-mediated licensing of central nervous system myeloid cells triggered astrocytic CCL2-release and promoted recruitment of inflammatory CCR2⁺-monocytes, which are the main effectors of disease progression. By employing a cell-specific knockout model, we identify the nuclear receptor peroxisome proliferator-activated receptor γ (PPARγ) in myeloid cells as key regulator of their disease-determining interactions with autoreactive T cells and brain-resident cells, respectively. LysM-PPARγ^KO mice exhibited disease exacerbation during the effector phase of experimental autoimmune encephalomyelitis characterized by enhanced activation of central nervous system myeloid cells accompanied by pronounced local CCL2 production and inflammatory monocyte invasion, which finally resulted in increased demyelination and neuronal damage. Pharmacological PPARγ activation decreased antigen-specific T cell-mediated licensing of central nervous system myeloid cells, reduced myeloid cell-mediated neurotoxicity and hence dampened central nervous system autoimmunity. Importantly, human monocytes derived from patients with multiple sclerosis clearly responded to PPARγ-mediated control of proinflammatory activation and production of neurotoxic mediators. Furthermore, PPARγ in human monocytes restricted their capacity to activate human astrocytes leading to dampened astrocytic CCL2 production. Together, interference with the disease-promoting cross-talk between central nervous system myeloid cells, autoreactive T cells and brain-resident cells represents a novel therapeutic approach that limits disease progression and lesion development during ongoing central nervous system autoimmunity.