FENIB (familial encephalopathy with neuroserpin inclusion bodies) is caused by intracellular accumulation/polymerization of mutant neuroserpins in the endoplasmic reticulum (ER). Transgenic rats overexpressing megsin (Tg meg), a newly identified serine protease inhibitor (serpin), demonstrated intraneuronal periodic-acid Schiff (PAS)-positive inclusions distributed throughout deeper layers of cerebral cortex, CA1 of the hippocampus, and substantia nigra. Hippocampal extracts from Tg meg rats showed increased expression of ER stress proteins, and activation of caspases-12 and -3, associated with decreased neuronal density. Enhanced ER stress was also observed in dopaminergic neurons in the substantia nigra, in parallel with decreased neuronal viability and motor coordination. In each case, PAS-positive inclusions were also positive for megsin. These data suggest that overexpression of megsin results in ER stress, eventuating in the formation of PAS-positive inclusions. Tg meg rats provide a novel model of FENIB, where accumulation of serpins in the ER induces selective dysfunction/loss of specific neuronal populations.