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IL-17 producing Th17 cells are the key participants in various autoimmune diseases including multiple sclerosis (MS) and its animal model, experimental autoimmune encephalomyelitis (EAE). Although differentiation of Th17 cells are known to be regulated by specific transcription factors and cytokines, the role of microRNAs that control this inflammatory T cell subset and whether targeting microRNAs can have therapeutic effects are not understood well. We found that microRNA-21 expression is elevated in Th17 cells and Mir-21-/- mice show a defect in Th17 differentiation and are resistant to EAE. Mir-21-/- T cells fail to induce known factors required for Th17 differentiation, such as transcription factor RORgt and the cytokine IL-21. However, Mir-21-/- mice have normal Th1, Th2 and Treg differentiation. The T cell intrinsic function of Mir-21 was clearly demonstrated by the sensitivity to EAE of the Mir-21-/- mice into which WT CD4+ T cells were transferred. Mir-21 promoted Th17 differentiation by targeting Smad-7, a negative regulator of TGF-beta signaling and Th17 differentiation. Finally, we found that anti-Mir-21 treatment reduced clinical severity of EAE associated with decrease in Th17 cells. These findings demonstrate that Mir-21 confers susceptibility to EAE by affecting inflammatory Th17 responses and identify Mir-21 as a new target for therapeutic intervention in MS.