Viral hemorrhagic septicemia (VHS) and the associated virus (VHSV) were identified in newly metamorphosed Pacific herring Clupea pallasi and Pacific sand lances Ammodytes hexapterus captured from Puget Sound, Washington, between 1995 and 1998. During that 4-year period, virus was detected in less than 1% of free-ranging, age-0 Pacific herring; however, when groups of these fish were confined in the laboratory, they experienced severe mortality, occasionally exceeding 50%, with the prevalence of VHSV reaching 100% by 14 d postcapture. At 7–21 d postcapture, VHSV titers peaked in excess of 108 plaque-forming units/g of tissue; by 30 d postcapture, however, the virus could no longer be isolated. Fish surviving beyond 30 d eliminated the virus from their tissues, but some remained lethargic and continued to show signs of hemorrhage around the mouth, skin, and fins until about 6 weeks postcapture. No cutaneous ulcers were observed during either the acute or the recovery phases of infection. Eighteen-month-old Pacific herring captured from the same area were also negative for VHSV but developed active infections after confinement for 7 d. Unlike younger fish, only 8.4% of these older fish died of VHS, and 7.7% of survivors were positive for VHSV at 7–10 d postcapture, which suggests that a higher proportion of the older fish had developed resistance to VHSV from prior exposure to it. Three months after fatalities ceased in the laboratory-held fish, the surviving fish were challenged with 5 3 103 plaque-forming units/mL of VHSV for 1 h. No mortality was observed during the next 30 d, and virus was recoverable at very low titers in fewer than 5% of the challenged fish, indicating the development of an active immunity to VHSV. Laboratory cohabitation of infected wild Pacific herring with laboratory-reared, specific-pathogen-free Pacific herring resulted in transmission of VHSV to the nonimmune fish, with the resulting course of disease resembling that seen in wild Pacific herring confined in the laboratory. The possible effects of VHS on stocks of Pacific herring are discussed.