Distinction between acute disseminated encephalomyelitis and acute multiple sclerosis is often clinically difficult. Perivenous demyelination is the pathological hallmark of acute disseminated encephalomyelitis, whereas confluent demyelination is the hallmark of acute multiple sclerosis. We investigated whether perivenous demyelination versus confluent demyelination distinguishes acute disseminated encephalomyelitis from multiple sclerosis. Patients with perivenous demyelination (n = 13; median age 43 years, range 5–67) on brain biopsy and/or autopsy, ascertained retrospectively, were compared with a cohort with confluent demyelination only (n = 91; 84% multiple sclerosis, 16% isolated syndrome at follow-up; median age 39 years, range 10–69). Clinical presentation, course and the International Paediatric Multiple Sclerosis Study Group clinical criteria for acute disseminated encephalomyelitis were assessed in both cohorts. Among the perivenous demyelination cohort, 10 patients had only perivenous demyelination and three also had confluent demyelination. All but one patient with perivenous demyelination only had a monophasic course, whereas two of three with both types had a relapsing course. The perivenous demyelination cohort was more likely than the confluent demyelination cohort to present with encephalopathy (P < 0.001), depressed level of consciousness (P < 0.001), headache (P < 0.001), meningismus (P = 0.04), cerebrospinal fluid pleocytosis (P = 0.04) or multifocal enhancing magnetic resonance imaging lesions (P < 0.001). A distinct pattern of cortical microglial activation and aggregation without associated cortical demyelination was found among six perivenous demyelination patients, all of whom had encephalopathy and four of whom had depressed level of consciousness. This pattern of cortical pathology was not observed in the confluent demyelination cohort, even in one patient with depressed level of consciousness. Clinical criteria were 80% sensitive and 91% specific for pathologically defined acute disseminated encephalomyelitis (perivenous demyelination), but misdiagnosed acute disseminated encephalomyelitis among 9% of patients with confluent demyelination and multiple sclerosis diagnosis at last follow-up. Perivenous demyelination is associated with meningoencephalopathic presentations and a monophasic course. Depressed level of consciousness is a more specific clinical criterion for pathologically confirmed acute disseminated encephalomyelitis than encephalopathy, which over-diagnosed acute disseminated encephalomyelitis among multiple sclerosis patients. A distinct pattern of cortical microglial activation without cortical demyelination may be the pathological correlate of depressed level of consciousness in acute disseminated encephalomyelitis. Although pathological evidence of perivenous demyelination may be superior to clinical criteria for diagnosing acute disseminated encephalomyelitis, the co-occurrence of perivenous and confluent demyelination in some individuals suggests pathogenic overlap between acute disseminated encephalomyelitis and multiple sclerosis and misclassification even with biopsy.