Chikungunya virus (CHIKV) is an emerging cause of acute encephalitis syndrome (AES) in India, with limited data on its role in childhood AES in southern India. We systematically evaluated children with AES in southern India during a non-epidemic period for CHIKV. Serum and cerebrospinal fluid (CSF) samples were tested for CHIKV using IgM ELISA and real-time reverse transcriptase PCR. Amplicon sequencing was performed on PCR-positive samples. Clinical and laboratory features were compared between children with and without CSF CHIKV positivity (PCR/IgM antibodies). Of 376 children with AES, 20 (5.3%) had positive CHIKV tests. Co-infections were common, particularly with scrub typhus. Children presented with diverse symptoms affecting various organ systems. Neurological manifestations included meningism, seizures, cerebellar signs, behavioral abnormalities, cranial nerve involvement, involuntary movements, and hemiparesis/hemiplegia. Children with CSF CHIKV positivity showed more focal neurological deficits and transaminitis, and less musculoskeletal symptoms. Sequencing confirmation of CHIKV was made in all patients with positive CHIKV PCR, revealing a close relationship with 2016 Kenyan and Indian strains, albeit in a different clade within the East/Central/South African genotype. Along with important mutations known to impact CHIKV infectivity, four novel amino acid substitutions were detected in envelope protein coding regions. Our findings underscore the importance of routine and comprehensive CHIKV testing for children with AES, irrespective of season/outbreak. The high rate of co-infections warrants further research. Continued genomic surveillance is essential to monitor emerging mutations with epidemic potential, increased severity and the risk of neurological disease.