Two outbreaks of border disease occurred on farms with sheep flocks and breeding cattle. The infection of the pregnant sheep was probably caused by transmission of virus from calves persistently infected with non-cytopathic bovine virus diarrhoea virus (BVDV) which were kept in close confinement with the ewes during mid-pregnancy. Border disease was also induced experimentally in eight lambs by exposing their dams at 38 to 78 days of gestation to a heifer persistently infected with BVDV. Both the natural and the experimental infections were characterised by typical signs such as 'hairy-shaker' lambs and high lamb mortality. The diagnosis was confirmed by virus isolations from live-born lambs, seroconversion and pathology. The study supports the assertion that cattle persistently infected with BVDV and in close contact with pregnant sheep, are an important source of strains of virus capable of causing border disease.