The involvement of Peach latent mosaic viroid (PLMVd) in an extensive chlorosis of peach known as calico (PC) has been advanced but ultimate proof is lacking. Sequencing of 16 full-length PLMVd cDNA clones of a PC isolate revealed two groups of variants. Nine had a size (336-338 nt) similar to that of typical PLMVd variants of nonsymptomatic and mosaic-inducing isolates, whereas the other 7 were longer (348-351 nt) due to an insertion of 12-13 nt. This insertion was always found in the hairpin loop capping the hammerhead arm, had a limited sequence variability, and folded itself into a hairpin. When three PLMVd dimeric transcripts, two with and the other without the insertion, were slash-inoculated on GF-305 peach seedlings, PC symptoms were produced exclusively by the RNAs containing the insertion, which was conserved in the progeny. These data demonstrate that the agent of PC is PLMVd. Direct support that the 12- to 13-nt insertion contains the PC pathogenicity determinant was obtained by its removal through site-directed mutagenesis from one of the PC-inducing variants. Inoculations with dimeric transcripts of the resulting variant showed that it could replicate but without eliciting symptoms. Our results also suggest that the insertion emerges sporadically de novo.