Objective To investigate the value of peripheral blood monocyte-to-lymphocyte ratio (MLR) and neutrophil-to-lymphocyte ratio (NLR) in evaluating the severity and prognosis of pediatric viral encephalitis (VE). Methods A retrospective analysis was performed for the clinical data of 268 children with VE who were admitted to the Department of Pediatrics, Zhucheng People's Hospital, from February 2020 to September 2024. According to the Glasgow Coma Scale (GCS) score, the children were divided into critical group (109 children; GCS score ≤8) and non-critical group (159 children; GCS score >8). According to the results of Glasgow Outcome Scale after follow-up for six months, the children were divided into poor prognosis group (84 children; grade 1-3) and good prognosis group (184 children; grade 4-5). The influencing factors for disease severity and prognosis were analyzed, and the value of peripheral blood MLR and NLR in predicting disease severity and prognosis was assessed. Results The multivariate logistic regression analysis showed that high neutrophil (NEU) count, high MLR, high NLR, and low lymphocyte (LYM) count were closely associated with the critical condition and poor prognosis in children with VE (P<0.05). The receiver operating characteristic curve analysis showed that MLR and NLR had an area under the curve (AUC) of 0.772 and 0.883, respectively, for predicting critical illness in children with VE (P<0.05), as well as an AUC of 0.715 and 0.930, respectively, for predicting poor prognosis (P<0.05). Conclusions Peripheral blood MLR and NLR are associated with critical condition and poor prognosis and can be used as biomarkers for assessing the disease severity and prognosis in children with VE on admission.