Background and Purpose Most of the knowledge of Mycoplasma pneumonia ( M. pneumoniae ) encephalitis (MPE) in children is based on case reports or small case series. This study aimed to describe the clinical features and prognostic factors of MPE, and the efficacy of azithromycin with or without immunomodulatory therapy. Methods The medical data of 87 patients with MPE from 3 medical centers in southwestern China over a 7-year period were reviewed. Results MPE was found in children of all ages except for neonates. The most common neurological manifestations included consciousness disturbance (90%) and headache (87.4%), the most common extraneurological manifestations included fever (96.5%) and respiratory system involvement (94.3%); multisystem involvement (98.2%) and elevated C-reactive protein (CRP) (90.8%) were also prominent. M. pneumoniae was detected in cerebrospinal fluid (CSF) less often than in blood and respiratory tract secretions. Azithromycin with intravenous immunoglobulin or/and corticosteroid treatment can shorten the hospitalization duration and the clinical improvement process. Most patients (82.8%) received a favorable prognosis; serum lactate dehydrogenase (LDH) and CSF protein levels were higher in the poor-outcome group than in the good-outcome group ( p <0.05). Neurological sequelae are likely to continue when the onset of this condition occurs during teenage years. Conclusions MPE generally presented with nonspecific clinical manifestations. In children with acute encephalitis accompanied by multi-system involvement and prominently elevated CRP, M. pneumoniae should be considered as a possible pathogen. Immunomodulating therapies should be recommended regardless of the duration of the prodromal period. High CSF protein level, blood LDH elevation, and higher age may be associated with an unfavorable outcome.