Multiple sclerosis (MS) is an inflammatory disease of the central nervous system. The primary pathological target in multiple sclerosis is myelin. Most MS patients follow a relapsing-remitting (RR-MS) course for 10 to 15 years that transforms into a chronic or secondary progressive disease (SP-MS). This review summarizes studies from our laboratory that implicate activated microglia and astrocytes in early stages of myelin destruction in MS brain. In addition, we review evidence that indicates that axonal transection is a major pathological process in multiple sclerosis. Our data support the hypothesis that neurological disability in RR-MS is due to inflammatory demyelination while axonal loss plays a significant role in the irreversible neurological decline in SP-MS. Further elucidation of the pathological targets and pathological mechanisms of tissue destruction in MS brain will help identify new therapeutics.