Pulmonary changes in five 1-week-old, colostrum-deprived lambs transtracheally inoculated with parainfluenza type 3 virus were studied by immunofluorescent, microscopic, and ultrastructural techniques. The lambs were killed at postinoculation days (PID) 3, 5, and 7. Immunofluorescence specific for parainfluenza type 3 virus was first seen in small airways and alveolar epithelium and later in the lumens of airways and alveoli and, to a lesser extent, in the interstitium of the lungs. Grossly, there were multifocal areas of consolidation in all lobes of the lungs. These areas were characterized microscopically by bronchiolitis and interstitial pneumonitis. The bronchiolitis involved the terminal airways and consisted of necrosis and sloughing of epithelial cells followed by hyperplasia of the epithelium. The interstitial lesion comprised extensive infiltration of alveolar septa and alveoli with macrophages and the necrosis of alveolar epithelium. This was followed by hyperplasia of the epithelium. Degenerated bronchiolar and alveolar epithelium contained numerous intracytoplasmic inclusions early in the infection, but such inclusions were not seen in the lambs killed at PID 7. The degenerated changes were also seen with the electron microscope, as were numerous inclusions of viral nucleoprotein and a few viral buds at PID 3 and 5. Viral inclusions and buds were seen in ciliated and nonciliated bronchial epithelial cells and type I and type II alveolar epithelial cells.