Acute disseminated encephalomyelitis (ADEM) is an uncommon monophasic idiopathic inflammatory demyelinating disease. Available diagnostic criteria do not reliably distinguish it from first presentations of relapsing diseases such as multiple sclerosis (MS) and neuromyelitis optica (NMO). In this article, we review current concepts about ADEM and what distinguishes it from other idiopathic inflammatory demyelinating disease, and we highlight controversial aspects and diagnostic problems. We review pathological differences between ADEM and MS in terms of their utility in the diagnosis of ADEM. Finally, we present a practical approach for management of patients suspected of having ADEM when the diagnosis is uncertain.