Sheep pulmonary adenomatosis (SPA) is a naturally occurring contagious lung tumour of sheep which has been associated aetiologically with a type D- and B-related retrovirus (Jaagsiekte retrovirus; JSRV). To improve understanding of the aetio-pathogenesis of SPA, the distribution and the sites of JSRV replication in sheep with naturally or experimentally induced SPA or in unaffected controls were identified. New immunological reagents were produced and a blocking enzyme-linked immunosorbent assay (B-ELISA) and an immunohistochemical technique for the detection of JSRV major capsid protein at the tissue and cellular levels were developed. JSRV was detected only in the respiratory tract of sheep affected by pulmonary adenomatosis and specifically in the transformed epithelial cells of the alveoli of SPA-affected sheep.