Experimental autoimmune encephalomyelitis (EAE), a widely recognized animal model of multiple sclerosis (MS), is highly useful for studying inflammation, demyelination, and neurodegeneration in the central nervous system (CNS). EAE exhibits many similarities with MS, which is a chronic inflammatory disease affecting CNS white matter in humans. Various studies have indicated that EAE is a particularly useful animal model for understanding both the mechanisms of immune-mediated CNS pathology and also the progressive clinical course of MS. Demyelination and axonal dysfunction have previously been shown in MS and EAE but current evidences indicate that axonal damage and neuron death also occur, demonstrating that these diseases harbor a neurodegenerative component. Recent studies also have shown that the activation of calpain and caspase pathways contribute to the apoptotic death of oligodendrocytes and neurons, promoting the pathological events leading to neurological deficits. Apoptosis is involved in the disease-regulating as well as in the disease-promoting processes in EAE. This review discusses the major involvement of calpain and caspase pathways in causing demyelination and neurodegeneration in EAE animals.