Toxoplasma gondii is a widespread protozoan parasite that causes severe disease only in immunocompromised individuals. Equipped with excellent animal models and relatively advanced systems for genetics, T. gondii provides an excellent system for understanding pathogenesis. Resistance to toxoplasmosis is governed by rapid innate and adaptive immunity that is characterized by a Th1 type profile of cytokines. Despite this effective response, acute infections can cause considerable damage and the parasite effectively establishes a long-term chronic infection that predisposes the host to reactivation and provides a means of eventual transmission. This complex interaction is brought about by the differentiation of the parasite from a rapidly replicating, lytic form (known as the tachyzoite) to a slow-growing form (known as the bradyzoite) that gives rise to chronic infection. The population structure of T. gondii is remarkably clonal, consisting of just three predominant lineages that are geographically widespread and found in a variety of hosts including humans. Acute virulence is strongly associated with the type I genotype which exhibits an enhanced replication rate in vitro and higher tissue burdens in vivo relative to non-virulent lineages. The pathology associated with acute infection appears to be due to excessive production of acute inflammatory mediators, suggesting that disease is partly due to over-response of the host immune system. A combination of refined animal models and newly developed genetic tools for establishing the relative contribution of genes to pathogenesis will enable a comprehensive analysis of the molecular basis of virulence in toxoplasmosis.