Objective <p>To compare the clinical and biochemical parameters and outcomes in children with acute encephalitis syndrome (AES) with and without hyponatremia.</p> Methods <p>A prospective observational study conducted at a tertiary care teaching hospital included children aged 6&#xa0;months to 12&#xa0;years with AES defined as acute fever (&lt; 7&#xa0;days) and neurological symptoms such as new-onset seizures or altered mental status lasting more than 12&#xa0;h. AES was categorized as neurological or systemic AES. Serum electrolyte samples were collected upon admission and daily for three days to assess the occurrence of hyponatremia (serum sodium &lt; 135&#xa0;mmol/L). Outcomes were assessed one-month after discharge using the Pediatric Modified Rankin Scale (mRS).</p> Results <p>Out of 200 children with AES, 49 (24.5%) had hyponatremia. Hyponatremia was significantly associated with hepatomegaly (<i>P</i> = 0.002), elevated blood urea (<i>P</i> = 0.033), elevated serum creatinine (<i>P</i> = 0.038), decreased serum albumin (<i>P</i> = 0.013) and decreased serum calcium (<i>P</i> = 0.002). Children with hyponatremia experienced significantly greater mortality (<i>P</i> = 0.020) and a longer hospital stay (<i>P</i> = 0.047). Multivariate analysis revealed significant associations between hyponatremia and hepatomegaly (OR 2.22) and mortality (OR 3.17). Hyponatremia and poor outcomes were more common in children with neurological AES compared to systemic AES syndrome.</p> Conclusion <p>Hyponatremia was found in one-fourth of cases of AES and had a significant association with mortality and longer hospital stay.</p>