Lyme encephalopathy, primarily manifested by disturbances in memory, mood, and sleep, is a common late neurologic manifestation of Lyme disease. We compared 20 patients with Lyme encephalopathy with 11 fibromyalgia patients and 11 nonpsychotically depressed patients using the California Verbal Learning Test, Wechsler Memory Scale, Rey-Osterrieth Complex Figure Test, Minnesota Multiphasic Personality Inventory (MMPI), and Beck Depression Inventory. Compared with patients with fibromyalgia or depression, the Lyme encephalopathy group showed mild, but statistically significant, memory deficits on two of the three memory tests. In contrast, the patients with fibromyalgia scored significantly higher than both other groups on the MMPI scale most sensitive to somatic concerns (scale 1), while the depressed patients scored higher than the Lyme patients on the scales most sensitive to depression (scale 2) and anxiety (scale 7). Physical complaints and depression were not major factors in memory performance among Lyme patients. These data support the hypothesis that Lyme encephalopathy is caused by CNS dysfunction and cannot be explained as a psychological response to chronic illness.