A high level of interferon (IFN) was found in the synovial fluid of goats with naturally acquired caprine arthritis-encephalitis (CAE), a disease caused by caprine arthritis-encephalitis virus (CAEV), a nononcogenic retrovirus of the lentivirus group. Intraarticular injection of CAEV or control inoculum in the joints of affected goats caused increased amounts of IFN production in synovial fluid.