Varicella is an acute febrile, highly infectious disease. We describe the incidence and types of neurologic complications in children up to 16 years old. Hospitalized varicella cases were prospectively captured by active nationwide surveillance through the German Pediatric Surveillance Unit for Rare Diseases from January 2003 to December 2004. Neurologic complications occurred in 232 (25.4%) of 918 hospitalized children with varicella, and were the most frequent reason for hospitalization. The median age was 4.2 years (interquartile range 2.5-5.9). The median duration of hospital stay was 6 days (interquartile range 3-11). Neurologic complications were more frequent (P=0.054) in immunocompetent (32%) than immunocompromised (4%) children. The most frequent diagnoses comprised acute cerebellar ataxia in 72 (31.0%), febrile convulsion in 69 (29.7%), meningoencephalitis in 52 (22.4%), cerebral convulsions in 21 (9.1%), syncope in 9 (3.9%), and cerebral vasculitis/infarction in 6 (2.6%) of all children with neurologic complications. Twenty-eight (12%) demonstrated sequelae (18 with ataxia, four with epilepsy, two with hemiparesis, three with cerebral nerve palsy, and one with dysesthesia). Three patients died. The yearly incidence of neurologic varicella-associated hospitalizations was estimated at 2.4 neurologic complications per 100,000 children, corresponding to about one neurologic complication in 2000 varicella cases.