143 people treated for tick-borne encephalitis (TBE) were included in a retrospective follow-up study. Sequelae and epidemiological characteristics in 114 individuals were analysed. The case fatality rate and the prevalence of residual paresis were low, 1.4 and 2.7%, respectively. However, 40 (35.7%) individuals were found to have a postencephalitic syndrome after a median follow-up time of 47 months, and a majority (77.5%) of these were classified as moderate to severe. Various mental disorders, balance and co-ordination disorders and headache were the most frequently reported symptoms. Increasing age was correlated to a longer duration of hospital stay, longer convalescence and increased risk of permanent sequelae. Results from a neuropsychiatric questionnaire showed marked differences between the subjects with sequelae compared to controls. 57% had noticed a tick bite before admission, and 48% were aware of at least one person in their environment who previously had contracted TBE. 79% were permanent residents or visited endemic areas often and regularly. In conclusion, we have found that TBE in the Stockholm area has a low case fatality rate, but gives rise to a considerable number of different neurological and mental sequelae, which justifies vaccination of a defined risk population in endemic areas.