Neuroinflammation can cause major neurological dysfunction, without demyelination, in both multiple sclerosis (MS) and a mouse model of the disease (experimental autoimmune encephalomyelitis; EAE), but the mechanisms remain obscure. Confocal in vivo imaging of the mouse EAE spinal cord reveals that impaired neurological function correlates with the depolarisation of both the axonal mitochondria and the axons themselves. Indeed, the depolarisation parallels the expression of neurological deficit at the onset of disease, and during relapse, improving during remission in conjunction with the deficit. Mitochondrial dysfunction, fragmentation and impaired trafficking were most severe in regions of extravasated perivascular inflammatory cells. The dysfunction at disease onset was accompanied by increased expression of the rate-limiting glycolytic enzyme phosphofructokinase-2 in activated astrocytes, and by selective reduction in spinal mitochondrial complex I activity. The metabolic changes preceded any demyelination or axonal degeneration. We conclude that mitochondrial dysfunction is a major cause of reversible neurological deficits in neuroinflammatory disease, such as MS.