Mosquito-borne flaviviruses are a major current and emerging threat, affecting millions of people worldwide. Global climate change, combined with increasing proximity of humans to animals and mosquito vectors by expansion into natural habitats, coupled with the increase in international travel, have resulted in significant spread and concomitant increase in the incidence of infection and severe disease. Although neuroinvasive disease has been well described for some viral infections such as Japanese Encephalitis virus (JEV) and West Nile virus (WNV), others such as dengue virus (DENV) have recently displayed an emerging pattern of neuroinvasive disease, distinct from the previously observed, systemically-induced encephalomyelopathy. In this setting, the immune response is a crucial component of host defence, in preventing viral dissemination and invasion of the central nervous system (CNS). However, subversion of the anti-viral activities of macrophages by flaviviruses can facilitate viral replication and spread, enhancing the intensity of immune responses, leading to severe immune-mediated disease which may be further exacerbated during the subsequent infection with some flaviviruses. Furthermore, in the CNS myeloid cells may be responsible for inducing specific inflammatory changes, which can lead to significant pathological damage during encephalitis. The interaction of virus and cells of the myeloid lineage is complex, and this interaction is likely responsible at least in part, for crucial differences between viral clearance and pathology. Recent studies on the role of myeloid cells in innate immunity and viral control, and the mechanisms of evasion and subversion used by flaviviruses are rapidly advancing our understanding of the immunopathological mechanisms involved in flavivirus encephalitis and will lead to the development of therapeutic strategies previously not considered.