A 1-year-old, male Australian Shepherd Dog with consanguineous parents was discovered to have severe nonregenerative anemia associated with osteopetrosis. Diagnosis of the bone abnormality was established by skeletal radiography and microscopic examination of a rib biopsy specimen. The anemia was attributed to failure to develop normal marrow cavities combined with failure of extramedullary erythropoiesis. Although blood transfusions sustained the dog's life for 15 months, the dog died of a hemolytic transfusion reaction.