Microsporidiosis with concurrent megabacteriosis in budgerigar (Melopsittacus undulatus) chicks contributed to significant economic floss in a commercial pet bird aviary in Mississippi. Three budgerigar chicks, 1-2 weeks old, from the aviary were necropsied. Microscopic lesions in the chicks consisted of heavy infection of enterocytes with microsporidia (2/3; autolysis precluded critical evaluation of the intestine of chick No. 2), multifocal hepatic necrosis and inflammation with intralesional microsporidia (1/3), spherical clusters of microsporidia in the hepatic sinusoids in the absence of inflammation (1/3), and gastric megabacteriosis (3/3). The ultrastructure of the microsporidian spores was consistent with an Encephalitozoon species. The polymerase chain reaction and Southern blot analysis were used to identify the microsporidian as Encephalitozoon hellem, an organism that has only been identified in humans. Encephalitozoon hellem causes keratoconjunctivitis and respiratory infections in humans with acquired immunodeficiency syndrome. This report presents the first confirmed case of microsporidiosis in budgerigars. The finding of E. hellem in pet birds may be important in elucidating the epidemiology of human infections with this organism.