OBJECTIVES: Using a reversible multistate model, we prospectively examined neuropsychiatric (NP) events for attribution, outcome and association with health-related quality of life (HRQoL), in an international, inception cohort of systemic lupus erythematosus (SLE) patients. METHODS: Annual assessments for 19 NP events attributed to SLE and non-SLE causes, physician determination of outcome and patient HRQoL (short-form (SF)-36 scores) were measured. Time-to-event analysis and multistate modelling examined the onset, recurrence and transition between NP states. RESULTS: NP events occurred in 955/1827 (52.3%) patients and 592/1910 (31.0%) unique events were attributed to SLE. In the first 2 years of follow-up the relative risk (95% CI) for SLE NP events was 6.16 (4.96, 7.66) and non-SLE events was 4.66 (4.01, 5.43) compared with thereafter. Patients without SLE NP events at initial assessment had a 74% probability of being event free at 10 years. For non-SLE NP events the estimate was 48%. The majority of NP events resolved over 10 years but mortality was higher in patients with NP events attributed to SLE (16%) versus patients with no NPSLE events (6%) while the rate was comparable in patients with non-SLE NP events (7%) compared with patients with no non-SLE events (6%). Patients with NP events had lower SF-36 summary scores compared with those without NP events and resolved NP states (p<0.001). CONCLUSIONS: NP events occur most frequently around the diagnosis of SLE. Although the majority of events resolve they are associated with reduced HRQoL and excess mortality. Multistate modelling is well suited for the assessment of NP events in SLE.