Many viruses cause encephalitis, but understanding the mechanisms by which viral infection leads to encephalopathy or dementia remain elusive. In many cases, inflammation generated by the host's attempt to combat the infection is itself implicated as a primary factor in causing neuronal dysfunction or degeneration. In this review, we outline the current state of knowledge regarding the pathophysiology of CNS (central nervous system) injury in viral infection. We focus our review on the neuropathogenesis of HIV type 1 (HIV-1)-associated dementia, because, within this class of infection, it is the best studied. We will also discuss the key similarities and differences in the pathological mechanisms of other important viral encephalitides. Understanding these mechanisms should ultimately enable development of immunomodulatory therapies for treating these infections, as well as other neuro-inflammatory conditions.