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Borna virus replicated persistently in the brains of rats, causing frenzied and apathetic behavioral states in sequence but no mortality. The transient frenzied behavior was caused by an immune-mediated, cytolytic, encephalitic response that was unexpectedly self-limiting. Cessation of active pathological processes coincided with the onset of the passive phase of the disease. This study thus demonstrates suppression of virus-specific inflammation despite continuous viral replication and describes a new mechanism by which chronic encephalitis may become established.