An epidemic of cases of toxoplasmic encephalitis is occurring in patients with acquired immune deficiency syndrome (AIDS). Serological or histopathologic studies were performed on 70 cases with AIDS and toxoplasmic encephalitis. In many cases conventional stains of brain-tissue specimens failed to disclose Toxoplasma organisms; all were positive when stained by the peroxidase-antiperoxidase technique. Except for a single patient, serological titers were not indicative of an acute acquired infection. The ratio of titers in the agglutination test to titers in the Sabin-Feldman dye test seemed to be more predictive of active toxoplasmic encephalitis in patients with AIDS than either test alone. Based on histological and serological data, an approach is presented for diagnosis and treatment of suspected toxoplasmic encephalitis in patients with AIDS.