Multiple sclerosis (MS) is an autoimmune inflammatory disease of the central nervous system (CNS) characterized by progressive demyelination and disabling outcomes. CD4+ T cells are the most critical driving factor of relapsing MS, but little improvement has been noted upon deletion of the whole T cell population. Caffeic acid phenethyl ester (CAPE), one of the main active compounds of propolis, exhibits potent antitumour, anti-inflammatory, and antioxidant properties by suppressing nuclear factor-κB (NF-κB) transactivation. To investigate the therapeutic potential of CAPE in MS, we studied the effects of CAPE on cytokine levels, T cells, and NF-κB activities and in an experimental MS animal model. The results showed that cerebrospinal fluid (CSF) from patients with relapsing MS is characterized by increased levels of proinflammatory cytokines/chemokines that preferentially skew towards T helper 1 (Th1) cytokines. In vitro studies demonstrated that CAPE not only inhibited T cell proliferation and activation but also effectively modulated T cell subsets. Under both Th0- and Th1-polarizing conditions, the proportion of CD4+IFN-γ+ cells was downregulated, while CD4+Foxp3+ cells were increased. Moreover, nuclear translocation of NF-κB p65 was inhibited by CAPE. In a murine experimental autoimmune encephalomyelitis model, prophylactic treatment with CAPE significantly decreased the disease incidence and severity. Compared to the vehicle group, mice pretreated with CAPE showed diminished inflammatory cell infiltration, microglia/macrophage activation, and demyelination injury. Additionally, CAPE pretreatment reduced the level of Th1 cells in both spleen and the CNS and increased regulatory T cells (Tregs) in the CNS. In conclusion, our results highlight the potential merit of CAPE in suppressing T cell activity mainly through targeting the pathogenic Th1 lineage, which may be beneficial for MS treatment.