Powassan virus strain M794, a member of the Flavivirus genus known to infect man and animals in Canada, was inoculated intracerebrally into rabbits and horses. No clinical signs were observed in rabbits, but widespread encephalitis resulted, characterized by lymphoid perivascular cuffing, lymphocytic meningitis, and lymphocytic choroiditis. In horses, eight days after inoculation, prominent neurological signs occurred and lesions were those of non-suppurative encephalomyelitis, neuronal necrosis, and focal parenchymal necrosis. The virus could not be reisolated from the rabbit or horse brains. Pathologic features, useful in separating some of the common North American equine neurological diseases, are discussed.