The acute encephalitis syndrome has heralded the emergence of multiple virulent pathogens, including Murray Valley encephalitis, Hendra virus and Australian bat lyssavirus, which may result in severe morbidity and mortality. In Australia, encephalitis is not notifiable and there has been no analysis of trends in encephalitis death rates or causation. Australian Bureau of Statistics mortality and population data for the period 1979-2006 were obtained and cause of death data were extracted using ICD-9 (1979-1998) and ICD-10 (1999-2006) codes that included all relevant encephalitis related diagnoses. Encephalitis-associated deaths were analysed by cause, year, age and gender. Between 1979 and 2006 there were 1,118 encephalitis-associated deaths in Australia. The average annual death rate was 2.3 per 1 million population (range 1.3-3.6). There was a significant decline in encephalitis-associated deaths, particularly due to 'known' pathogens (4.3% decline per year, 95% CI 3.1-5.4%, P<0.0001). The aetiology of 576 deaths were unknown and the proportion of deaths due to 'unknown' encephalitis increased from 47.0% between 1979 and 1992, to 57.2% from 1993 to 2006. Downward trends in encephalitis deaths due to 'known' causes can largely be explained by changes in treatment and prevention methods, particularly for herpes encephalitis (use of acyclovir), and measles encephalitis and subacute sclerosing panencephalitis (measles vaccination). The high proportion of encephalitis deaths from 'unknown' pathogens in Australia highlights the importance of monitoring encephalitis morbidity and mortality with a view to improving pathogen diagnosis and identifying emerging infectious diseases.