MS strips nerves of a protective fatty sheath called myelin, impairing their ability to transmit signals.
Researchers at Cambridge and Harvard Universities have discovered a gene called Olig 1 can stimulate the re-growth of myelin.
It is hoped the Science study may eventually lead to new treatments.
MS is an inflammatory disease which causes a range of symptoms from fatigue and numbness to difficulties with movement, speech and memory.
The relapsing-remitting form of the disease follows a characteristic pattern of periods of deterioration followed by partial recovery.
During remissions, damaged nerves in the brain and spinal cord become recovered with myelin.
The latest research has shown that Olig 1, previously thought to aid the development of certain brain cells, jump-starts this process.
A close cousin of the gene, Olig 2, was thought to play a key role in the production of myelin-producing cells called oligodendrocytes during the development of the foetus.
However, the role of Olig 1 has been less clear.
Antibody clues
The researchers examined the role of both genes by using antibodies to highlight the location within brain cells of embryonic and adult mice of the proteins that Olig 1 and 2 produce.
In embryonic cells proteins produced by both genes were found in the cells' central powerhouse, the nucleus, suggesting a key role for both genes in the production of myelin-producing cells.
However, in adult cells, Olig 1 had migrated to the cytoplasm outside the nucleus, where there are no genes to regulate.
But when the scentists looked at adult cells from rodents with MS-type symptoms they found Olig 1 was back in the nucleus.
Effectively, the damaged cells had reverted to a foetal state in which Olig 1 was back at the centre of the action, and apparenty able to oversee renewed production of oligodendrocytes.
The researchers found that mice bred without Olig 1 were unable to repair demyelinated cells.
Human samples
They went on to examine the localtion of Olig 1 in samples taken from human MS patients.
In healthy areas of the brain the gene appeared inactive, but it was active in damaged regions.
Researcher Dr Robin Franklin said: "This suggests that the Olig 1's function has been shaped by evolution to repair the brain in areas where the insulating layer of myelin has been depleted through disease."
While the cycle of damage and repair can go on for many years in MS patients, eventually the system wears down, and in most people the disease progresses with fewer remissions.
Dr Charles Stiles, from Harvard's Dana-Farber Institute, said: "Perhaps the signal that calls Olig 1 into service becomes weaker.
"Although this finding will not yield direct results in terms of finding treatment for MS we are confident that it gives new insight and direction for research."
Mike O'Donovan, chief executive of the Multiple Sclerosis Society, said: "There is increasing optimism that a way can be found of repairing the damage caused in MS.
"A great deal of research effort, including work we fund, is now being focused on it.
"This finding is an encouraging scientific step along a road which will hopefully lead to therapies."
Chris Jones, chief executive of the MS Trust, agreed that the study was a significant step forward.
"This will bring us a step closer to appreciating the remyelination process and the reasons why there is a failure to repair myelin in people with MS.
"It's early days, but the signs are positive."
Christine Purdy, of the MS International Federation, said: "For people with MS, the work gives great hope that this will contribute significantly to the much-desired therapeutic breakthroughs."