Objective: Thanks to the introduction of recent national guidelines for treating herpes simplex virus (HSV) encephalitis health outcomes have improved. This paper evaluates the costs and the health-related quality of life implications of these guidelines. Design and setting: A sub-analysis of data from a prospective, multi-centre, observational cohort ENCEPH-UK study conducted across 29 hospitals in the UK from 2012 to 2015. Study participants: Data for patients aged ≥16 years with a confirmed HSV encephalitis diagnosis admitted for treatment with aciclovir were collected at discharge, 3 and 12 months. Primary and secondary outcome measures: Patient health outcomes were measured by the Glasgow outcome score (GOS), modified ranking score (mRS), and the EuroQoL; health care costs were estimated per patient at discharge from hospital and at 12 months follow-up. In addition, Quality Adjusted Life years (QALYs) were calculated from the EQ-5D utility scores. Cost-utility analysis was performed using the NHS and Social Scare perspective. Results: A total of 49 patients were included, 35 treated within 48 hours ″early″ (median [IQR] 8.25 [3.7-20.5]) and 14 treated after 48 hours (median [IQR] 93.9 [66.7 - 100.1]). At discharge, 30 (86%) in the early treatment group had a good mRS outcome score (0-3) compared to 4 (29%) in the delayed group. EQ-5D-3L utility value at discharge was significantly higher for early treatment (0.609 vs 0.221, p<0.000). After adjusting for age and symptom duration at admission, early treatment incurred a lower average cost at discharge, £23,086 (95% CI: £15,186 to £30,987) vs £42,405 (95% CI: £25,457 to £59,354) [p<0.04]. A -£20,218 (95% CI: -£52,173 to £11,783) cost difference was observed at 12-month follow-up post discharge. Conclusions: This study suggests that early treatment may be associated with better health outcomes and reduced patient healthcare costs, with a potential for savings to the NHS with faster treatment.