Chlamydia psittaci was cultured from 29 of 35 koalas (Phascolarctos cinereus) with keratoconjunctivitis. The disease progressed from acute to chronic stages over some months, with a known duration of at least 2 years. One recovered carrier was found. Up to 29% of koalas in some populations were clinically affected. A seasonal spread of infection was indicated by the high percentage of acutely affected cases found in summer. There was no evidence of susceptibility being related to age or sex. The sera of all chronically affected koalas had complement fixation test titres against chlamydial group antigen of 80 or above; in acute cases the titre ranged from 0 to 320. Of normal koalas, 84% were serologically negative, 16% had chlamydial antibody. A titre of 80 or more considered in conjunction with ocular disease could be taken as presumptive evidence of a chlamydial etiology. Chlamydial keratoconjunctivitis may be the ocular disease which was associated with the decline of koala numbers between the years 1885 and 1930.