The genus Flavivirus, family Flaviviridae, contains some of the most important arboviral pathogens of man. The genus includes several aetiological agents of encephalitis, the most significant being Japanese encephalitis virus, West Nile virus and tick-borne encephalitis virus. In each case, the majority of exposed individuals will not develop disease, but a minority will develop a severe illness with a significant chance of permanent neurological damage or death. The factors that determine this are numerous, involving complex interactions between virus and host and are still being actively uncovered. In many cases it appears that the immune response, while crucial to containing the virus and limiting spread to the brain, is also responsible for causing neurological damage. Innate responses can limit viral replication but may also be responsible for generating pathological levels of inflammation. Neutralizing antibody responses are protective but take time to develop. The role of T cells is less clear, and may be either protective or pathogenic. This review summarizes recent developments in the understanding of the pathogenesis of encephalitis caused by flaviviruses.