Ninety-seven children had died and 146 were being treated for the disease, which occurs in seasonal outbreaks every summer, Shailesh Prasad Singh, a medical official in the Muzaffarpur district of the state, told Reuters.
"There are no good facilities here," Sunil Ram, the father of one girl that died, told Reuters partner ANI outside a government-run hospital on Sunday.
"Had the facilities been good, she would have never died."
State and central government authorities have said they are doing everything possible to treat the sick children.
Encephalitis is an inflammation of the brain, caused by any one of a number of viruses. Symptoms include high fever, vomiting and, in severe cases, seizures, paralysis and coma. Infants and elderly people are particularly vulnerable.
Five years ago, a similar outbreak killed about 380 people in Bihar, India's third most-populous state.Protesters gathered in New Delhi demanding immediate intervention by the central government in Bihar. Health Minister Harsh Vardhan visited the state on Sunday to assess the situation.