Murine gamma-herpesvirus 68 (MHV-68) is a natural pathogen of small rodents and insectivores (mice, voles and shrews). The primary infection is characterized by virus replication in lung epithelial cells and the establishment of a latent infection in B lymphocytes. The virus is also observed to persist in lung epithelial cells, dendritic cells and macrophages. Splenomegaly is observed two weeks after infection, in which there is a CD4+ T-cell-mediated expansion of B and T cells in the spleen. At three weeks post-infection an infectious mononucleosis-like syndrome is observed involving a major expansion of Vbeta4+CD8+ T cells. Later in the course of persistent infection, ca. 10% of mice develop lymphoproliferative disease characterized as lymphomas of B-cell origin. The genome from MHV-68 strain g2.4 has been sequenced and contains ca. 73 genes, the majority of which are collinear and homologous to other gamma-herpesviruses. The genome includes cellular homologues for a complement-regulatory protein, Bcl-2, cyclin D and interleukin-8 receptor and a set of novel genes M1 to M4. The function of these genes in the context of latent infections, evasion of immune responses and virus-mediated pathologies is discussed. Both innate and adaptive immune responses play an active role in limiting virus infection. The absence of type I interferon (IFN) results in a lethal MHV-68 infection, emphasizing the central role of these cytokines at the initial stages of infection. In contrast, type II IFN is not essential for the recovery from infection in the lung, but a failure of type II IFN receptor signalling results in the atrophy of lymphoid tissue associated with virus persistence. Splenic atrophy appears to be the result of immunopathology, since in the absence of CD8+ T cells no pathology occurs. CD8+ T cells play a major role in recovery from the primary infection, and also in regulating latently infected cells expressing the M2 gene product. CD4+ T cells have a key role in surveillance against virus recurrences in the lung, in part mediated through 'help' in the genesis of neutralizing antibodies. In the absence of CD4+ T cells, virus-specific CD8+ T cells are able to control the primary infection in the respiratory tract, yet surprisingly the memory CD8+ T cells generated are unable to inhibit virus recurrences in the lung. This could be explained in part by the observations that this virus can downregulate major histocompatibility complex class I expression and also restrict inflammatory cell responses by producing a chemokine-binding protein (M3 gene product). MHV-68 provides an excellent model to explore methods for controlling gamma-herpesvirus infection through vaccination and chemotherapy. Vaccination with gp150 (a homologue of gp350 of Epstein-Barr virus) results in a reduction in splenomegaly and virus latency but does not block replication in the lung, nor the establishment of a latent infection. Even when lung virus infection is greatly reduced following the action of CD8+ T cells, induced via a prime-boost vaccination strategy, a latent infection is established. Potent antiviral compounds such as the nucleoside analogue 2'deoxy-5-ethyl-beta-4'-thiouridine, which disrupts virus replication in vivo, cannot inhibit the establishment of a latent infection. Clearly, devising strategies to interrupt the establishment of latent virus infections may well prove impossible with existing methods.