EAE serves as an animal model for multiple sclerosis and is initiated by autoreactive T cells that infiltrate the CNS. Recognition of myelin‐associated Ags within the CNS leads to activation of the transcription factor family NFAT. Here, we demonstrate an essential role for NFAT in disease induction, as the combined lack of NFAT1 (NFATc2) and NFAT2 (NFATc1) completely protected mice. Single deficiency of either NFAT1 or NFAT2 ameliorated the course of EAE, and NFAT2 ablation resulted in an obstructed proinflammatory reaction. However, NFAT1 deficit led to an anti‐inflammatory response with nonpathogenic Th17 and Th2 cells concurrently secreting IL‐17, IL‐4, and IL‐10. Both IL‐4 and IL‐10 contributed to disease protection. In Nfat1−/− CD4+ T cells, the expression of anti‐inflammatory lymphokines was mediated by NFAT2, thus directly enabling protective IL expression. Consequently, blocking NFAT in toto may be an option for immunosuppressive therapy. More importantly, selective NFAT1 blockade could represent a safe long‐term immunomodulatory treatment approach for multiple sclerosis patients, potentially avoiding the adverse effects of global immunosuppression.