Animal influenza viruses (AIVs) are a major threat to human health and the source of pandemic influenza. A reliable small-mammal model to study the pathogenesis of infection and for testing vaccines and therapeutics against multiple strains of influenza virus is highly desirable. We show that cotton rats (Sigmodon hispidus) are susceptible to avian and swine influenza viruses. Cotton rats express α2,3-linked sialic acid (SA) and α2,6-linked SA residues in the trachea and α2,6-linked SA residues in the lung parenchyma. Prototypic avian influenza viruses (H3N2, H9N2, and H5N1) and swine-origin 2009 pandemic H1N1 viruses replicated in the nose and in the respiratory tract of cotton rats without prior adaptation and produced strong lung pathology that was characterized by early lung neutrophilia, followed by subsequent pneumonia. Consistent with other natural and animal models of influenza, only the H5N1 virus was lethal for cotton rats. More importantly, we show that the different avian and pandemic H1N1 strains tested are strong activators of the type I interferon (IFN)-inducible MX-1 gene both locally and systemically. Our data indicate that the cotton rat is a suitable small-mammal model to study the infection of animal influenza viruses and for validation of vaccines and therapeutics against these viruses.