Following EDS'76 virus (BC14 virus) infection of breeder chickens by the conjunctival route, vertical transmission occurred in the first week after infection. In the progeny which had been infected with EDS'76 virus by the vertical route, increasing haemagglutination inhibiting (HI) titres to BC14 virus and increasing numbers of birds with HI titres were observed from 3 weeks to 15 weeks of age. Sixty-one per cent of the hens and 77 per cent of the cocks had 2 log HI BC14 virus titres exceeding 4 at an age of 15 weeks. Some birds which han been serologically negative throughout the rearing period, seroconverted between 25 and 28 weeks of age. This phenomenon occurred in hens as well as in cocks. Simulation of stress twice during the laying period by injection of corticosteroid hormone did not increase the number of birds serologically positive to EDS'76 virus. EDS'76 was observed in the group of hens that was vertically infected, since egg production was significantly depressed between 28 and 34 weeks of age. Probably this was mainly the results of a production drop in the hens showing serconversion at 27 or 28 weeks of age. In this group of fowl vertically infected with EDs'76 virus, serologically positive birds appeared to be protected for the greater part to BC14 virus challenge at 50 weeks of age, while negative birds seemed to be fully susceptible. Chicks hatched from eggs collected in the third and fourth week after infection of the dams had maternal antibodies. Fertility and hatchability of apparently normally shelled eggs seemed not to be affected after BC14 virus infection of the dams. Intensive contact with contaminated faeces is probably an indispensable condition for lateral transmission of the virus.