Peanut (Arachis hypogaea L.) lines exhibiting high levels of resistance to peanut stripe virus (PStV) were obtained following microprojectile bombardment of embryogenic callus derived from mature seeds. Fertile plants of the commercial cultivars Gajah and NC7 were regenerated following co-bombardment with the hygromycin resistance gene and one of two forms of the PStV coat protein (CP) gene, an untranslatable, full length sequence (CP2) or a translatable gene encoding a CP with an N-terminal truncation (CP4). High level resistance to PStV was observed for both transgenes when plants were challenged with the homologous virus isolate. The mechanism of resistance appears to be RNA-mediated, since plants carrying either the untranslatable CP2 or CP4 had no detectable protein expression, but were resistant or immune (no virus replication). Furthermore, highly resistant, but not susceptible CP2 T0 plants contained transgene-specific small RNAs. These plants now provide important germplasm for peanut breeding, particularly in countries where PStV is endemic and poses a major constraint to peanut production.