Necrotizing encephalitis of the Yorkshire terrier is a chronic non-suppurative encephalitis that was reported in approximately 15 cases worldwide. We report the case of a 10-year-old female Yorkshire terrier with gross evidence of severe cortical degeneration and necrosis. Microscopically, affected areas were mainly located in the cortical white matter and in the mesencephalon without implication of the cerebellum. Cavitation necrosis, demyelination, gemistocytic astrocytosis, marked perivascular lymphocytic cuffing with a diffuse lymphocytic/histiocytic/gitter cell infiltration characterized the lesions. Immunohistochemical analysis identified the major infiltration of T lymphocytes and macrophages with implication of some cytotoxic lymphocytes and IgG-producing plasma cells; depositions of IgG in the affected white matter were also observed. Specific stains did not reveal fungal, protozoal or bacterial organisms and reverse transcriptase-polymerase chain reaction analysis for distemper virus was also negative. The lympho-histiocytic inflammation suggests a T-cell-mediated and a delayed-type immune reaction as a possible pathogenic mechanism for this brain disorder.