The native Australian marsupial Phascolarctos cinereus, otherwise known as the koala, is prone to infection by the obligate intracellular parasite Chlamydia psittaci, which causes ocular 'pink eye' and urogenital 'dirty tail' diseases. Several chlamydial DNA probes to both chromosomal and plasmid sequences were used to type by Southern blot analysis 51 samples taken from wild and captive koalas from habitats on the eastern seaboard of Australia as far apart as Queensland and Victoria. Two types of C. psittaci were observed and called types I and II. Type II was found more frequently than type I and occurred in both ocular and urogenital samples, while type I showed a strong but not absolute preference for ocular sites. Cross-hybridization analyses indicated that type I and type II had about 10% DNA sequence identity to each other. DNA analyses showed that type II was very closely related to some ovine and bovine chlamydiae but type I could not be related to any other C. psittaci strain available. Light and electron microscopic analyses of infected BGM monolayers revealed that the two strains were similar in morphological characteristics. The type I strain was considerably more infectious than the type II strain in BGM cells and in the yolk sacs of embryonated eggs. A PCR based assay detected both type I and type II koala chlamydiae in samples that had been negative by Southern blot and tissue culture and provided the first evidence that both types can occur simultaneously at the one site of infection.