Multiple sclerosis (MS) is a devastating chronic autoimmune demyelinating disease of the central nervous system (CNS), thought to affect more than 2.5 million people worldwide. Regulation of the sleep-wake cycle might influence disease activity and the frequency of relapses in patients. As melatonin (or sleep hormone) involves the regulation of circadian rhythms, much attention has been paid to the management of MS symptoms with melatonin. This review describes the pharmacological mechanisms underlying the neuroprotective effects of melatonin and recent clinical evidence from MS patients. Apparent risks and benefits of melatonin therapies are also discussed. Various in vivo and clinical data presented in this up-to-date review suggest that melatonin may possibly possess a protective role against the behavioral deficits and neuropathological characteristics of MS. Multiple mechanisms of the neuroprotective effects of melatonin such as mitochondrial protection and antioxidant, anti-inflammatory, and anti-apoptotic properties, as well as its anti-demyelinating function are also discussed. A large body of evidence shows that melatonin potently regulates the immune system, demyelination, free radical generation, and inflammatory responses in neural tissue, which are mediated by multiple signal transduction cascades. In the present article, we focus on different pathways that are targeted by melatonin to prevent the development and progression of MS.