Annual ryegrass (Lolium rigidum) parasitised by Anguina agrostis and Corynebacterium rathayi causes neurological signs and brain lesions thought to be associated with a vasoconstrictor effect of the toxic grass. In three separate experiments of six to 112 days duration parasitised ryegrass was fed to 21 adult sheep. The concentrations of many blood constituents were examined, liver biopsies taken, necropsies performed and tissues other than brain examined by light and electron microscopy. The invariable finding was liver damage indicated by increased plasma concentrations of liver specific enzymes and bilirubin. There was diffuse vacuolation of hepatocytes due to gross distension of cisternae of rough endoplasmic reticulum, as well as necrosis of individual hepatocytes, fatty change, biliary hyperplasia and hepatocytic regeneration. The changes were not typical of experimental hepatic ischaemia and may have been due to a cytopathic effect of toxic annual ryegrass.