Demyelinating diseases, such as multiple sclerosis, are characterized by inflammatory demyelination and neurodegeneration of the central nervous system. Therapeutic strategies that induce effective neuroprotection and enhance intrinsic repair mechanisms are central goals for future therapy of multiple sclerosis. Oestrogens and oestrogen receptor ligands are promising treatments to prevent multiple sclerosis-induced neurodegeneration. In the present study we investigated the capacity of oestrogen receptor β ligand treatment to affect callosal axon demyelination and stimulate endogenous myelination in chronic experimental autoimmune encephalomyelitis using electrophysiology, electron microscopy, immunohistochemistry and tract-tracing methods. Oestrogen receptor β ligand treatment of experimental autoimmune encephalomyelitis mice prevented both histopathological and functional abnormalities of callosal axons despite the presence of inflammation. Specifically, there were fewer demyelinated, damaged axons and more myelinated axons with intact nodes of Ranvier in oestrogen receptor β ligand-treated mice. In addition, oestrogen receptor β ligand treatment caused an increase in mature oligodendrocyte numbers, a significant increase in myelin sheath thickness and axon transport. Functional analysis of callosal axon conduction showed a significant improvement in compound action potential amplitudes, latency and in axon refractoriness. These findings show a direct neuroprotective effect of oestrogen receptor β ligand treatment on oligodendrocyte differentiation, myelination and axon conduction during experimental autoimmune encephalomyelitis.