The advent of MRI has contributed to increase the interest and awareness in childhood white matter disorders. A major priority is to distinguish transient and self-limited demyelinating syndromes like disseminated encephalomyelitis (DEM), from life-long diseases like multiple sclerosis (MS). However, the term DEM has been inconsistently applied across studies due to the lack of clear clinical and neuroimaging diagnostic criteria. The present review summarizes the available literature on DEM in children, outlines the main clinical and neuroimaging features at presentation, pathogenesis and outcome, and its differentiation from other conditions with acute impact in the CNS. The recently proposed clinical definitions for monophasic disseminated encephalomyelitis and its relapsing variants are discussed, and controversies surrounding the diagnosis of MS in children are addressed.