This study proposes a new neural machine translation (NMT) model based on the encoder-decoder model that incorporates named entity (NE) tags of source-language sentences. Conventional NMT models have two problems enumerated as follows: (i) they tend to have difficulty in translating words with multiple meanings because of the high ambiguity, and (ii) these models’abilitytotranslatecompoundwordsseemschallengingbecausetheencoderreceivesaword, a part of the compound word, at each time step. To alleviate these problems, the encoder of the proposed model encodes the input word on the basis of its NE tag at each time step, which could reduce the ambiguity of the input word. Furthermore,the encoder introduces a chunk-level LSTM layer over a word-level LSTM layer and hierarchically encodes a source-language sentence to capture a compound NE as a chunk on the basis of the NE tags. We evaluate the proposed model on an English-to-Japanese translation task with the ASPEC, and English-to-Bulgarian and English-to-Romanian translation tasks with the Europarl corpus. The evaluation results show that the proposed model achieves up to 3.11 point improvement in BLEU.