Seventy-nine 1-year-old lambs from three individual farms and a feedlot were examined for natural lentivirus infection. We used three different methods to detect infection and to identify the stage of the ovine lentivirus life cycle in blood-derived macrophages. Cytopathic infectious virus was obtained from 14/14 Border Leicester animals obtained from a naturally infected flock. Neither virus particles, virus proteins, virus specific antibodies nor viral DNA were detected in samples from 34 lambs from two South Kansas City farms. However, among 31 feedlot lambs, we identified 11 infected animals. Specific viral proteins were immunoprecipitated from macrophages of one animal, but no infectious cytopathic virus was isolated from these cells. Cells from ten of the other feedlot animals harboured viral DNA but neither viral particles nor proteins could be detected by our techniques. Thus, in these naturally infected animals, the virus life cycle either proceeded to completion, subject to differentiation of infected precursor cells in blood, or remained arrested at the DNA stage despite maturation of monocytes to macrophages. Sequence analysis of the env gene of viral genomes from two of the ten feedlot sheep showed sequences distinct from those of known ovine and caprine lentiviruses. Surprisingly, these sequences have a higher identity (of nucleotide and derived amino acid sequences) to caprine arthritis-encephalitis virus than to the ovine prototype, maedi-visna virus. These data suggest that the ovine and caprine lentiviruses found in North American sheep may have a common ancestral genotype that is closely related to the caprine virus.