During 1988, 2 farmers in the Bega district agisted pregnant cattle in the Hunter Valley of New South Wales. On return to the district to calve, 54% of calves from herd 1 and 30% of calves from herd 2 were affected with congenital arthrogryposis or hydranencephaly caused by Akabane virus infection. Field observations and laboratory findings from this outbreak are presented, illustrating the danger of moving immunologically naive animals into areas where Akabane virus is endemic.