ABSTRACT: Introduction The reported incidence of JE among patients with acute encephalitic syndrome (AES) in Nepal ranges between 20% to 62%. In light of the lack of up-to-date data, we sought to describe the epidemiology of JE in Chitwan, Nepal. Methods A prospective observational study was conducted during 2010–2012 in the College of Medical Science in the Chitwan District. Patients with suspected JE were tested for anti-JE IgM in serum and cerebrospinal fluid (CSF). Results Of 227 all patients tested, 18 (7.9%) were found positive for JE. 17/202 (8.4%) patients with AES had JE. All, with the exception of two patients, were diagnosed on the basis of positive a serologic test, both in serum and CSF samples. Patients with JE were significantly older (42.1±27.6 years) than patients without JE (25.6±25.2 years, p = 0.02). Half of JE cases occurred in adults older than 50. More of the JE cases (11/18, 61.1%) occurred during the rainy season when compared to the JE negative patients [71/209, (34%), p = 0.01]. None of the JE patients had a relevant travel history, and one recalled having been immunized against JE. There was a variation in the geographic distribution of cases across the districts of the central Terai. Conclusions In this cohort, the proportion of patients with AES who had JE was lower than in previous studies. In addition, most patients were adults, and cases were not distributed uniformly across the central Terai region. The risk of acquiring JE by short-term travelers in the area is likely to be low. Vector-control programs and the promotion of mosquito avoidance behavior in the Terai region should continue. The high proportions of adults among patients with JE may suggest recent changes in the epidemiology of JE in the central Terai region, and routine immunization of all adults should be considered.