Theiler's disease is an acute hepatitis in horses that is associated with the administration of equine blood products; its etiologic agent has remained unknown for nearly a century. Here, we used massively parallel sequencing to explore samples from a recent Theiler's disease outbreak. Metatranscriptomic analysis of the short sequence reads identified a 10.5-kb sequence from a previously undescribed virus of the Flaviviridae family, which we designate "Theiler's disease-associated virus" (TDAV). Phylogenetic analysis clusters TDAV with GB viruses of the recently proposed Pegivirus genus, although it shares only 35.3% amino acid identity with its closest relative, GB virus D. An epidemiological survey of additional horses from three separate locations supports an association between TDAV infection and acute serum hepatitis. Experimental inoculation of horses with TDAV-positive plasma provides evidence that several weeks of viremia preceded liver injury and that liver disease may not be directly related to the level of viremia. Like hepatitis C virus, the best characterized Flaviviridae species known to cause hepatitis, we find TDAV is capable of efficient parenteral transmission, engendering acute and chronic infections associated with a diversity of clinical presentations ranging from subclinical infection to clinical hepatitis.