Encephalitis causes high rates of illness and death, yet its epidemiology remains poorly understood. To improve incidence estimates in England and inform priority setting and treatment and prevention strategies, we used hospitalization data to estimate incidence of infectious and noninfectious encephalitis during 2005-2009. Hospitalization data were linked to a dataset of extensively investigated cases of encephalitis from a prospective study, and capture-recapture models were applied. Incidence was estimated from unlinked hospitalization data as 4.32 cases/100,000 population/year. Capture-recapture models gave a best estimate of encephalitis incidence of 5.23 cases/100,000/year, although the models' indicated incidence could be as high as 8.66 cases/100,000/year. This analysis indicates that the incidence of encephalitis in England is considerably higher than previously estimated. Therefore, encephalitis should be a greater priority for clinicians, researchers, and public health officials.