Incubation of human myelin at neutral pH resulted in the proteolytic conversion of the myelin-associated glycoprotein to a lower molecular weight derivative (dMAG) and the degradation of basic protein. The formation of dMAG occurred much more rapidly than the degradation of basic protein. The formation of dMAG and the degradation of basic protein both occurred significantly more rapidly in myelin preparations purified from brains of patients with multiple sclerosis than in preparations from control brain. The results suggest that this neutral protease associated with myelin may function in the pathogenesis of demyelinating diseases such as multiple sclerosis.