Neurological signs were observed in 3 lambs at approximately 1 month of age, in a flock of 1 ram and 29 ewes with 43 lambs. Deterioration occurred such that the lambs had either died or been killed by 4 months of age. Necropsies of two of these lambs revealed a diffuse encephalopathy in which the most prominent feature was ballooned neurons. Sections of frozen brain showed PAS-positive, oil red O-negative, and weak Sudan Black-positive material in the swollen neuronal cytoplasm. The ultrastructure of the neuronal inclusions showed characteristic whorled membranes, suggesting diagnosis of a gangliosidosis. The underlying enzymic defect was investigated by assaying 11 lysosomal enzymes in extracts of kidney from an affected lamb and from normal lambs. A deficiency (90%) of acidic beta-D-galactosidase was found in the affected lamb. All other activities, including N-acetylneuraminidase, were normal. A specific deficiency of lysosomal beta-D-galactosidase was demonstrated by separating the lysosomal and cytosolic beta-D-galactosidase by chromatography on concanavalin A-Sepharose. Diagnosis of GM1-gangliosidosis, analogous to the severe infantile form of the human disease, was made on the basis of the pathology and enzymology. The beta-D-galactosidase activity in the white blood cells of the ram and several of the ewes was consistent with their being heterozygotes. This disorder is different from a previously described lipidosis in sheep, in which there was a combined deficiency of beta-D-galactosidase and alpha-neuraminidase.