We report the clinical and histopathologic features of 17 patients with orf or milkers' nodule infection. The majority were male, 12 to 65 years of age, and gave a history of contact with farm animals. Most lesions affected the hands or arms, ranged in size from 1 to 3 cm, and occurred on average 3 weeks after presumed exposure. On low-power examination the epidermis showed endophytic strandlike proliferations and the dermal papillae were distended by intense edema. There was massive capillary proliferation and dilation and a dense inflammatory infiltrate. High-power examination revealed epidermal viral cytopathic changes with inclusion bodies, clumping of keratohyalin, and cytoplasmic vacuolation that had a distinctive "spongiform" appearance within follicular structures. We conclude that orf and milkers' nodule infection have distinctive histopathologic features, and, in contrast to some previous reports, viral changes may frequently be found.