Ten patients with the syndrome described by Reye and co-workers as encephalopathy with fatty degeneration of the viscera have been studied over a 5-year period. This disorder represents a rather common cause of acute, severe cerebral disturbance in childhood. It appears to include a great majority of the cases previously diagnosed as "acute toxic encephalopathy" and "acute brain swelling." A prodromal illness, which was thought to be of viral etiology, was present in all of the children of the present series, and in two the prodrome consisted of typical chickenpox. The viral illness appeared to have run its course by the time the hepatic and central nervous system disorder manifested itself. Viral cultures at the time of the encephalopathy were negative. Abnormalities in selected liver function tests were striking, with marked elevations in SGOT in all patients and with evidence of ammonia intoxication in the three patients in whom blood ammonia levels were followed. Serum bilirubin, on the other hand, remained normal or only slighth elevated. In both the survivors and those with irreversible brain damage, there was a very rapid return of liver functions to normal. Histologic changes in the liver also disappeared rapidly and completely. There were five deaths in the series and one of the survivors was left with severe brain damage. Vigorous treatment for hepatic failure was attempted in three patients. The results of this therapy have so far been disappointing, with only one survivor. The etiology of this disorder remains obscure, but present evidence suggests that it is best classified as a postviral syndrome.