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Objective To investigate whether intravenous immunoglobulin (IVIG) improves neurological outcomes in children with encephalitis when administered early in the illness.Design Phase 3b multicentre, double-blind, randomised placebo-controlled trial.Setting Twenty-one hospitals in the UK.Participants Children aged 6 months to 16 years with a diagnosis of acute or subacute encephalitis, with a planned sample size of 308.Intervention Two doses (1 g/kg/dose) of either IVIG or matching placebo given 24–36 hours apart, in addition to standard treatment.Main outcome measure The primary outcome was a ‘good recovery’ at 12 months after randomisation, defined as a score of≤2 on the Paediatric Glasgow Outcome Score Extended.Secondary outcome measures The secondary outcomes were clinical, neurological, neuroimaging and neuropsychological results, identification of the proportion of children with immune-mediated encephalitis, and IVIG safety data.Results 18 participants were recruited from 12 hospitals and randomised to receive either IVIG (n=10) or placebo (n=8) between 23 December 2015 and 26 September 2017. The study was terminated early following withdrawal of funding due to slower than anticipated recruitment, and therefore did not reach the predetermined sample size required to achieve the primary study objective; thus, the results are descriptive. At 12 months after randomisation, 9 of the 18 participants (IVIG n=5/10 (50%), placebo n=4/8 (50%)) made a good recovery and 5 participants (IVIG n=3/10 (30%), placebo n=2/8 (25%)) made a poor recovery. Three participants (IVIG n=1/10 (10%), placebo n=2/8 (25%)) had a new diagnosis of epilepsy during the study period. Two participants were found to have specific autoantibodies associated with autoimmune encephalitis. No serious adverse events were reported in participants receiving IVIG.Conclusions The IgNiTE (ImmunoglobuliN in the Treatment of Encephalitis) study findings support existing evidence of poor neurological outcomes in children with encephalitis. However, the study was halted prematurely and was therefore underpowered to evaluate the effect of early IVIG treatment compared with placebo in childhood encephalitis.Trial registration number Clinical Trials.gov NCT02308982; ICRCTN registry ISRCTN15791925.