BACKGROUND Japanese encephalitis virus (JEV) is endemic in Thailand and prevention strategies include vaccination, vector control, and health education. METHODS Between July 2003 and August 2005, we conducted hospital-based surveillance for encephalitis at seven hospitals in Bangkok and Hat Yai. Serum and cerebrospinal (CSF) specimens were tested for evidence of recent JEV infection by immunoglobulin M (IgM) enzyme-linked immunosorbent assay (ELISA) and a plaque reduction neutralization test (PRNT). RESULTS Of the 147 patients enrolled and tested, 24 (16%) had evidence of acute flavivirus infection: 22 (15%) with JEV and two (1%) with dengue virus. Of the 22 Japanese encephalitis (JE) cases, 10 (46%) were aged ≤ 15 years. The median length of hospital stay was 13 days; one 13-year-old child died. Ten percent of encephalitis patients enrolled in Bangkok hospitals were found to have JEV infection compared to 28% of patients enrolled in hospitals in southern Thailand (p < 0.01). Four (40%) of the 10 children with JE were reported as being vaccinated. CONCLUSIONS JEV remains an important cause of encephalitis among hospitalized patients in Thailand. The high proportion of JE among encephalitis cases is concerning and additional public health prevention efforts or expanded vaccination may be needed.