Nervous system involvement in Lyme borreliosis is a much-feared, often-misunderstood disorder. Both the peripheral and central nervous systems may be involved, typically in a multifocal, patchy fashion, perhaps suggesting a vasocentric mechanism. Clinical manifestations vary widely, depending on the site and severity of involvement. Although neurologic manifestations observed in Europe differ somewhat from those reported in the United States, there are also striking similarities, permitting some generalization of information obtained in each population. In general, diagnosis of neurologic disease requires objective evidence of nervous system damage, and must be differentiated from both psychiatric disorders and metabolic encephalopathies, both of which typically occur in the absence of significant neurologic damage or infection. Laboratory confirmation of nervous system involvement by Borrelia burgdorferi has limitations. However, neurophysiologic testing of the peripheral nervous system, imaging of the neuraxis, and examination of the cerebrospinal fluid can all be informative. In contrast, to date functional brain imaging has been of limited specificity. Treatment with one of several straightforward antimicrobial regimens, typically 2-4 weeks in duration, generally results in microbiologic cure. Although some symptoms may persist after this, the data do not suggest that these are responsive to further antimicrobial therapy.