Recent studies revealing active mechanisms of immune privilege in neural tissues have diminished the putative role of passive tolerance. To examine the significance of Ag localization in the retina on immune privilege, the immune responses of transgenic mice expressing high and low levels of beta-galactosidase (beta-gal) in the photoreceptor cells of the retina were compared with those of normal mice and those of mice expressing moderate levels of beta-gal systemically. Immunization with beta-gal induced experimental autoimmune uveoretinitis indistinguishable from that induced by known photoreceptor cell autoantigens, including destruction of photoreceptor cells, in transgenic mice with high level retinal expression. Retinal expression had no apparent effect on the immune responses to beta-gal, showing that tolerance was not elicited by levels of retinal beta-gal sufficient to serve as a target for autoimmune disease. Mice with systemic expression exhibited reduced lymphoproliferative responses following immunization with beta-gal and did not develop autoimmune disease. T cells prepared from normal mice immunized with beta-gal transferred experimental autoimmune uveoretinitis to the transgenic mice with high level retinal beta-gal expression, but no disease was found in mice with systemic transgene expression under these conditions. The results of our experiments are most consistent with sequestration being the primary mechanism of retinal immune privilege. The results also show that beta-gal can serve as an immunopathogenic neural autoantigen, and that T cells raised by immunization of normal mice with a foreign Ag can be immunopathogenic in certain transgenic recipients.