We investigated the epidemiology and etiology of encephalitis at four tertiary hospitals in Bangladesh during 2003-2005. Patients who met a clinical case definition for acute encephalitis and had cerebrospinal fluid (CSF) pleocytosis were eligible for enrollment; a standardized sampling pattern was used to enroll eligible patients. Recent Japanese encephalitis virus (JEV) infection was defined by presence of IgM antibodies against JEV in CSF or serum. Twenty (4%) of 492 cases had laboratory evidence of recent JEV infection; two died. All JE cases occurred during May-December, and cases were identified among all age groups. All cases resided in rural areas. Fifteen patients were re-assessed 4-6 weeks after hospitalization; 5 (33%) patients had physical disabilities and 7 (47%) reported cognitive difficulties. Infection with JEV is clearly an etiology of encephalitis in Bangladesh. Population-based studies to quantify burden of disease could assess options for targeted immunization programs.