A parapoxvirus has been implicated in the decline of the red squirrel in the United Kingdom. Virus was isolated from an outbreak of lethal disease in red squirrels in the north-east of England. Experimental infection of captive-bred red squirrels confirmed that this virus was the cause of the severe skin lesions observed. Electron microscopic examination of the virus showed that it had a morphology typical of parapoxviruses whilst preliminary sequence data suggested a genomic G + C composition of approximately 66%, again similar to that found in other parapoxviruses. However Southern hybridization analysis failed to detect three known parapoxvirus genes, two of which have been found so far only in the genus Parapoxvirus. Comparative sequence analysis of two other genes, conserved across the eight recognized chordopoxvirus genera, suggests that the squirrel virus represents a previously unrecognized genus of the Chordopoxviridae.