The aim of this study was to compare the characteristics of the first demyelinating event between acute disseminated encephalomyelitis (ADEM) and multiple sclerosis (MS). Children with acute demyelinating disease of the central nervous system and an abnormal brain magnetic resonance image (MRI) were studied. Patients were assigned a final diagnosis after long-term follow-up. Comparisons were made between the MS and ADEM groups. Proposed definitions by the Pediatric MS Study Group were applied to our cohort in retrospect and are discussed. Fifty-two children and adolescents with a documented abnormal brain MRI were identified (24 females, 28 males; mean age 10y 11mo [SD 5y 4mo] range 1y 10mo-19y 7mo). To date, 26 children have been diagnosed with MS, and 24 with ADEM. One child has relapsing neuromyelitis optica and one child has clinically isolated optic neuritis. Follow-up duration was 6 years 8 months in monophasic patients, and 5 years 6 months in relapsing patients. None of the patients with MS had encephalopathy while encephalopathy was present in 42% of patients with ADEM. Cerebrospinal fluid oligoclonal bands, an elevated immunoglobulin and the periventricular perpendicular ovoid lesions correlated with MS outcome. Several clinical characteristics differ between ADEM and MS at first presentation; encephalopathy, when present, strongly suggests the diagnosis of ADEM.