Background There are few longitudinal studies of seasonal influenza-associated neurological disease (IAND) and none from the Southern Hemisphere. Methods We extracted prospectively acquired Australian surveillance data from 2 studies nested within the Paediatric Active Enhanced Disease Surveillance (PAEDS) network: the Influenza Complications Alert Network (FluCAN) study and the Australian Childhood Encephalitis (ACE) study between 2013 and 2015. We described the clinical features and severity of IAND in children, including influenza-associated encephalitis/encephalopathy (IAE). We calculated the proportion of hospitalized influenza that is associated with IAND and IAE, and incidence of IAE. Results Over 3 influenza seasons, we identified 54 cases of IAND at 2 tertiary children's hospitals from Australia that accounted for 7.6% of hospitalized influenza. These included 10 cases of IAE (1.4% hospitalized influenza). The mean annual incidence of IAE among Australian children (aged ≤14 years) was 2.8 per 1000000. The spectrum of IAND was broad and included IAE (n = 10) including distinct acute encephalopathy syndromes, simple febrile seizures (n = 14), other seizures (n = 16), acute ataxia (n = 4), and other subacute syndromes (transverse myelitis [n = 1], opsoclonus myoclonus [n = 1]). Two-thirds of children with IAND were aged ≤4 years; less than half had preexisting neurological disease or other risk factors for severe influenza. IAE caused death or neurological morbidity in half of cases. Conclusions Seasonal influenza is an important cause of acute neurological disease in Australian children. The spectrum of seasonal IAND appears similar to that described during the 2009 H1N1 pandemic. IAE is associated with high morbidity and mortality.