Subacute sclerosing panencephalitis (SSPE) is a chronic progressive neurological condition caused by a defective measles virus. It is postulated that immune‐dysregulation might result in persistent infection (immune evasion) as well as initiation of autoimmune phenomenon (via natural killer cells) leading to panencephalitis. The primary objective of this case‐control study was to analyse the pattern of immune dysregulation in cases with SSPE. The secondary objective was to assess the correlation between the measured immunological variables and disability/death at 6 months. This was an exploratory case–control study conducted at a tertiary‐care referral‐facility from January 2020 to September 2021. Thirty consecutive patients fulfilling the Dyken's criteria for SSPE and 30 age‐and‐sex‐matched healthy controls were enrolled. Immunological profile constituted by lymphocyte subset analysis, immunoglobulin levels and complement levels were done in all cases and controls. Cases were staged as per Jabbour's system; disability was assessed using the modified Rankin Scale (mRS). Patients with SSPE had a mean age of 14.76 years (±6.9 years). There were 25 males and 5 females; 6.7% cases belonged to Jabbour's first stage, 40% to second stage and 53.3% to third stage. At least 1/4th had evidence of measles vaccination. Levels of absolute lymphocyte count, B‐cells, T cells, helper T‐cells, and cytotoxic T‐cells were significantly higher in cases. IgG, IgM, and IgE levels were significantly higher while IgD levels were significantly lower in cases. At baseline, 13.3% of cases had a mRS score of 0–2 and 86.7% had a score of 3–6; at 6 months 10% had a mRS score 0–2 (favorable outcome) while 90% had a mRS score 3–6 (poor outcome). Higher IgE levels were found to correlate significantly with favorable outcome. Immune‐dysregulation may play a significant role in shaping one's response to measles infection as well as in determining vaccine‐efficacy.