Acute disseminated encephalomyelitis (ADEM) is an acute demyelinating disorder of the central nervous system, and is characterised by multifocal white matter involvement. Diffuse neurological signs along with multifocal lesions in brain and spinal cord characterise the disease. Possibly, a T cell mediated autoimmune response to myelin basic protein, triggered by an infection or vaccination, underlies its pathogenesis. ADEM is a monophasic illness with favourable long term prognosis. The differentiation of ADEM from a first attack of multiple sclerosis has prognostic and therapeutic implications; this distinction is often difficult. Most patients with ADEM improve with methylprednisolone. If that fails immunoglobulins, plasmapheresis, or cytotoxic drugs can be given. Recent literature suggests that a significant proportion of patients with ADEM will later develop multiple sclerosis; however, follow up experience from developing countries does not support this view.