A panel of serotype 3 (T3) reovirus strains was screened to determine their relative capacities to cause lethal infection and hepatobiliary disease following peroral inoculation in newborn mice. A wide range of 50% lethal doses (LD50s) was apparent after peroral inoculation of the different virus strains. Two of the strains, T3 Abney and T3 clone 31, caused mice to develop the oily fur syndrome associated with biliary atresia. The capacity to cause biliary atresia was not related to the capacity to cause lethal infection, however, because the LD50s of T3 Abney and T3 clone 31 were grossly disparate. Examination of liver and bile duct tissues revealed histopathologic evidence of biliary atresia and hepatic necrosis in T3 Abney-infected mice but not in mice inoculated with a T3 strain of similar virulence or with the hepatotropic T1 Lang strain. The consistency with which T3 Abney-infected mice developed biliary atresia-associated oily fur syndrome permitted us to determine the viral genetic basis of reovirus-induced biliary atresia. Analysis of reassortant viruses isolated from an in vitro coinfection with T3 Abney and T1 Lang indicated a strong association of the hepatobiliary disease-producing phenotype with the T3 Abney S1 gene, which encodes the viral cell attachment protein, sigma 1. Amino acid residues within the sigma 1 protein that were unique to disease-producing T3 strains were identified by comparative sequence analysis. Specific changes exist within two regions of the protein, one of which is thought to be involved in binding to host cell receptors. We hypothesize that changes within this region of the protein are important in determining the tropism of this virus for bile-ductular epithelium.