The incidence rate of Japanese encephalitis (JE) in the People's Republic of China has decreased substantially with the wide use of JE vaccine, but the accuracy of JE reporting is uncertain. We established active surveillance for acute meningitis and encephalitis syndrome (AMES) in four prefectures in China during 2006-2008 and performed JE laboratory testing on AMES cases identified from six sentinel hospitals in each prefecture. We estimated JE incidence for each prefecture by applying age-adjusted and season-adjusted JE positivity rates from sentinel hospitals to the total AMES resident cases. We identified 4,513 AMES cases, including 3,561 (79%) among residents of four prefectures. Among 2,294 AMES cases from sentinel hospitals, we identified 213 (9.2%) laboratory-confirmed JE cases. Adjusted estimates of JE incidence per 100,000 persons ranged from 0.08 in Shijiazhuang to 1.58 in Guigang. Active surveillance and laboratory confirmation provides a better estimate of the actual JE disease burden and should be used to further refine JE prevention strategies.