Acute Disseminated Encephalomyelitis (ADEM) complicating pregnancy is a rare occurrence, posing challenges to the management due to maternal and fetal risks including fetal loss, fetal anomalies, intrauterine fetal growth restriction (FGR) and preterm labour. We report a case of a 21-year-old primiparous woman who was diagnosed with ADEM during the second trimester. She was treated with high dose intravenous (IV) steroids as well as IV immunoglobulin. She made complete neurological recovery within two months, but there were fetal complications including oligohydramnios, intrauterine growth restriction and low birth weight. The baby was delivered via elective caesarean section due to suspicious cardiotocograph and abnormal fetal doppler studies indicative of compromised fetal circulation. The baby was given special baby care unit (SBCU) care. However, both the mother and baby were safely discharged following six days of special neonatal care. This is the first reported case of ADEM in pregnancy in Sri Lanka, and highlights the challenges in management.