In Rasmussen’s encephalitis, there is chronic inflammation of the brain, with infiltration of T lymphocytes into the brain tissue. In most cases, this affects only one cerebral hemisphere, either the left or the right. This inflammation causes permanent damage to the cells of the brain, leading to atrophy of the hemisphere; the epilepsy that this causes may itself contribute to the brain damage. The epilepsy might derive from a disturbed GABA release, the main inhibitory neurotransmitter of the mammalian brain.

The cause of the inflammation is not known: infection by a virus has been suggested, but the evidence for this is inconclusive. In the 1990s it was suggested that auto-antibodies against the glutamate receptor GluR3 were important in causing the disease, but this is no longer thought to be the case. However, more recent studies report the presence of autoantibodies against the NMDA-type glutamate receptor subunit GluRepsilon2 (anti-NR2A antibodies) in a subset of patients with Rasmussen's encephalitis. There has also been some evidence that patients suffering from RE express auto-antibodies against alpha 7 subunit of the nicotinic acetylcholine receptor. By sequencing T cell receptors from various compartments it could be shown that RE patients present with peripheral CD8+ T-cell expansion which in some cases have been proven for years after disease onset.

Rasmussen's encephalitis has been recorded with a neurovisceral porphyria, acute intermittent porphyria and after ADEM (acute disseminated encephalomyelitis).

Rasmussen's encephalitis, also known as chronic focal encephalitis (CFE), is a rare inflammatory neurological disease, characterized by frequent and severe seizures, loss of motor skills and speech, hemiparesis (weakness on one side of the body), encephalitis (inflammation of the brain), and dementia. The illness affects a single cerebral hemisphere and generally occurs in children under the age of 15.