Young beagle dogs were experimentally inoculated with canine adenovirus Type 2 and studied by virologic, histologic, immunoperoxidase, and ultrastructural methods from 1 to 26 days after inoculation. Virus was recovered from lungs at 2, 3, 5, and 8 days after inoculation. Virions and viral antigen were demonstrated by ultrastructural and immunoperoxidase techniques in nonciliated bronchiolar epithelial cells and mucous cells in bronchioles, bronchi, and trachea as well as in bronchial and tracheal submucosal gland epithelial cells. Viral replication in airways was associated with a severe necrotizing and proliferative bronchitis and bronchiolitis. Virus and viral antigen were demonstrated in Type 2 alveolar epithelial cells and were associated with interstitial pneumonia. Partial and complete stenosis of bronchioles by connective tissue was observed at 15 and 26 days after inoculation. There was a 50% reduction (P less than 0.02) in mean terminal bronchiolar cross-sectional area in the right middle lobe of virus-infected dogs at 26 days after inoculation. It is concluded that experimental adenovirus infection in dogs induces bronchiolitis obliterans and that this experimental model may be useful for studies on adenovirus-induced lung injury during early life.