Borna disease virus (BDV) is a negative-strand RNA virus which produces persistent infection in a variety of experimental animals. In the rat, the presence or absence of clinical signs of Borna disease, a characteristic, biphasic neurobehavioral illness, depends on host-related factors. A window of opportunity exists after birth wherein inoculation with BDV produces a persistently infected rat without signs of Borna disease or encephalitis (persistent, tolerant infection-newborn [PTI-NB] rat). Although immunopathological destruction of the nervous system does not occur in the PTI-NB rat, significant alterations in the development of the nervous system were noted, including site-specific lysis of neurons. Unlike the case with other pharmacologically produced, persistent, tolerant BDV infections, adoptive transfer of spleen cells from BDV-infected rats did not produce disease in the PTI-NB rats. PTI-NB rats developed Borna disease after being connected by parabiosis to rats with Borna disease. Bone marrow transplantation experiments revealed that bone marrow cells from PTI-NB rats produced Borna disease in lethally irradiated, BDV-infected recipient rats. Bone marrow from PTI-NB rats contained a complement of inflammatory cells capable of inducing Borna disease. Thus, the loss of BDV-specific cellular immunity appeared to occur after the release of cells from the bone marrow.