Evidence of diminution of therapeutic efficacy in 35% of interferon beta-1b (IFNB)-treated multiple sclerosis (MS) patients who developed neutralizing antibodies (NABs) led to extensive study of the effects of NABs on therapeutic benefits, side effects, and magnetic resonance imaging (MRI) data. First, we validated the IFNB NAB assay used in the multicenter trial by having representative stored serum samples reanalyzed by an independent laboratory. When NABs developed (as defined), usually in the first year, the exacerbation rates after 18 months resembled placebo rates, the numbers of enlarging MRI lesions significantly increased compared with those in NAB-negative patients, and there was increased new lesion formation in the MRI (p = 0.067). However, worsening of the mean Expanded Disability Status Scale score in the 8-MIU treatment arm was higher in patients who remained NAB-negative in the third year (p = 0.083). NAB-positive patients were not overrepresented among the noncompleters, or in five patients having at least one episode of skin-site necrosis. After 18 months, flu-like symptoms were about twice as common in NAB-negative as in NAB-positive patients, although the frequency did not exceed 21% in any semester. Decisions to discontinue IFNB therapy should be made individually based on clinical response and a positive titer of NABs in the serum with the use of a reliable assay. ELISA and Western blot techniques measure binding antibodies, not NABs specifically, and are unsuitable for use. Possible, but as yet unproven, means of dealing with NAB positivity should be studied in properly designed trials. IFNB-1b remains an effective therapy for a majority (65%) of MS patients having relapses. The annual exacerbation rates in NAB-negative patients receiving the 8-MIU dosage regimen are about 50% of those seen in untreated patients, a greater reduction than the one-third reduction earlier reported for the entire high-dose arm, and a meaningful treatment benefit.