Myxoma virus causes the systemic disease myxomatosis in the European rabbit (Oryctolagus cuniculus). Originating in the South American rabbit Sylvilagus brasiliensis, where it causes a relatively localized fibroma, myxoma virus is a classic example of a virus that has jumped species to produce an exotic disease and then coevolved with its new host. Like other poxviruses, myxoma virus encodes multiple proteins capable of downregulating the host innate and acquired immune responses. Other virus-encoded proteins enable replication in host lymphocytes and monocytes, for example, by inhibiting apoptosis. Detailed studies on these proteins have demonstrated novel methods of interactions with the host immune system and added substantially to the understanding of the interaction of large DNA viruses with their hosts. Despite the increasingly detailed molecular knowledge of myxoma virus, relatively little is known about the dynamics of the interaction of the virus with the integrated host-immune system during infection and, in particular, about the evolution of resistance to the virus in wild rabbits or the species barrier. This review will focus on the detailed molecular studies that have been done with myxoma virus and discuss the more limited knowledge of the pathogenesis of myxoma virus in rabbits and the ways that the consolidated immune responses may determine genetic resistance to myxomatosis.