During a canine distemper virus (CDV) outbreak in raccoons (Procyon lotor) from Cook County, Illinois, a juvenile female suffering from seizures was killed and necropsied. Gross and histologic findings of necrotizing encephalitis and proliferative bronchopneumonia were attributed to CDV infection and considered the cause of clinical signs. A section of cerebellum stained immunohistochemically for Neospora caninum revealed an approximately 40 μm diameter, round to oval cyst with a 2- to 3-μm-thick wall and filled with 1–2 μm diameter, round to oval bradyzoites. Polymerase chain reaction (PCR) results were positive for N. caninum using DNA extracted from the brain. Specific PCR for the closely related organisms Toxoplasma gondii and Hammondia heydorni yielded negative results. This case report provides histologic, immunohistochemical, and molecular evidence that raccoons are a naturally occurring intermediate host of N. caninum.