To determine the infectivity and transmissibility of Hendra virus (HeV). A disease transmission study using fruit bats, horses and cats. Eight grey-headed fruit bats (Pteropus poliocephalus) were inoculated and housed in contact with three uninfected bats and two uninfected horses. In a second experiment, four horses were inoculated by subcutaneous injection and intranasal inoculation and housed in contact with three uninfected horses and six uninfected cats. In a third experiment, 12 cats were inoculated and housed in contact with three uninfected horses. Two surviving horses were inoculated at the conclusion of the third experiment: the first orally and the second by nasal swabbing. All animals were necropsied and examined by gross and microscopic pathological methods, immunoperoxidase to detect viral antigen in formalin-fixed tissues, virus isolation was attempted on tissues and SNT and ELISA methods were used to detect HeV-specific antibody. Clinical disease was not observed in the fruit bats, although six of eight inoculated bats developed antibody against HeV, and two of six developed vascular lesions which contained viral antigen. The in-contact bats and horses did not seroconvert. Three of four horses that were inoculated developed acute disease, but in-contact horses and cats were not infected. In the third experiment, one of three in-contact horses contracted disease. At the time of necropsy, high titres of HeV were detected in the kidneys of six acutely infected horses, in the urine of four horses and the mouth of two, but not in the nasal cavities or tracheas. Grey-headed fruit bats seroconvert and develop subclinical disease when inoculated with HeV. Horses can be infected by oronasal routes and can excrete HeV in urine and saliva. It is possible to transmit HeV from cats to horses. Transmission from P poliocephalus to horses could not be proven and neither could transmission from horses to horses or horses to cats. Under the experimental conditions of the study the virus is not highly contagious.