Forty three koalas in a captive colony were investigated for the presence of Chlamydia psittaci infection and associated disease. Swabs were taken from conjunctivae and urogenital sites for cell culture isolation of C psittaci and for cytological examination (direct smears) for chlamydial inclusions and evidence of inflammation. On the basis of cell culture isolation, 28 samples from 25 koalas were positive for C psittaci (that is, infected). Three koalas were positive from both sites, 5 from conjunctivae alone and 17 from urogenital sites alone. Seven of the 8 koalas with positive conjunctival swabs had overt signs of conjunctivitis, but only 3 of the 20 koalas with positive urogenital swabs had overt signs of 'wet bottom' (continual urine soiling due to cystitis) or purulent discharge. However, 5 of the 20 with positive urogenital swabs had past episodes of 'wet bottom'. Moreover, examination of direct cytological smears showed evidence of inflammation (neutrophils) in 7 of 8 koalas with positive conjunctival swabs and 17 of 20 with positive urogenital swabs. Chlamydial inclusions were rarely identified with surety on direct cytological smears. In the 18 koalas without chlamydia, one had overt conjunctivitis while 2 had past episodes of conjunctivitis. The koala with conjunctivitis at the time of sampling had a prior history of 'wet bottom'. Examination of direct cytological smears revealed 2 of the chlamydial negative koalas had high numbers of neutrophils in urogenital smears. It was concluded that C psittaci infection may cause overt or sub-clinical disease, with the former developing when the koalas were stressed through management procedures or concomitant disease.