Jaagsiekte sheep retrovirus (JSRV) is the causative agent of ovine pulmonary adenocarcinoma (OPA). In this study, we followed over a 31-month period the natural transmission of JSRV in adult sheep and in their offspring. We established groups derived from flocks with either a high or low incidence of OPA and monitored virus transmission, clinical disease and macroscopic/microscopic lung lesions at necropsy. Results obtained show that (i) JSRV infection can occur perinatally or in the first few months of life in lambs and in adult sheep; (ii) only a minority of JSRV-infected animals develop clinical disease during their commercial lifespan; and (iii) JSRV is more readily detectable in peripheral blood leucocytes and lymphoid organs than in the lungs. These data support a model of opportunistic JSRV infection and tumorigenic conversion of type II pneumocytes/Clara cells in the lungs, while lymphoreticular cells serve as the principal virus reservoir.