A selective broth enrichment technique was used to study the distribution of Rhodococcus equi in soil and grazing animals. Rhodococcus equi was isolated from 54% of soils examined and from the gut contents, rectal faeces and dung of all grazing herbivorous species examined. Rhodococcus equi was not isolated from the faeces or dung of penned animals which did not have access to grazing. The isolation rate from dung was much higher than from other samples and this was found to be due to the ability of R. equi to multiply more readily in dung. Delayed hypersensitivity tests were carried out on horses, sheep and cattle, but only horses reacted significantly. The physiological characteristics of R. equi and the nature of its distribution in the environment suggested that R. equi is a soil organism.