The consistency with which Mycoplasma pneumoniae has been implicated as a cause of encephalitis, and the increased incidence of central nervous system (CNS) disease observed during M. pneumoniae respiratory outbreaks, support the role of M. pneumoniae as a CNS pathogen. Three pathophysiologic mechanisms have been proposed: direct infection, autoimmunity, and vascular occlusion. Recent evidence demonstrating the organism's ability to survive intracellularly, presence of its DNA in the serum of individuals with acute encephalitis, case reports in which the organism is detected in brain parenchyma or cerebrospinal fluid (CSF), and animal data demonstrating CNS invasion by several Mycoplasma species support the contention that M. pneumoniae is capable of direct infection of the CNS. Because of limitations of current serologic assays and difficulty in interpreting the significance of positive polymerase chain reaction results in regard to acuity of infection and viability of the organism, the diagnosis of M. pneumoniae-associated CNS disease should be based on a combination of positive tests and exclusion of alternative diagnoses.