Inbred mouse strains vary considerably in their susceptibility to the chronic neurologic disease caused by WM 1504 E virus. Although all strains inoculated with the virus showed evidence of viral replication, those strains destined to develop chronic disease showed consistently higher titers of viral antigen in their sera and also in their tissues, particularly in the central nervous system, than did resistant strains. Studies of hybrids made by mating susceptible C57BR/cdJ and resistant C57BL/6J strains indicated that resistance is dominant and not sex linked. The major areas of injury included neurons in the anterior horn of the spinal cord, the dentate nucleus of the cerebellum, and other nuclei in the brain stem. Involvement of oligodendrocytes with associated primary demyelination was also noted. Tissue damage accompanied intense gliosis but was without leukocyte infiltration. Immunopathologic studies and parabiotic experiments suggested that tissue injury was likely due to primary direct viral effects. Further, thymus-insufficient nude mice developed this chronic neurologic disease.