Goats infected with caprine arthritis-encephalitis virus (CAEV) show chronic arthritis and cachexia, which are progressive in nature. The immunopathogenic mechanisms responsible for these progressive clinical symptoms have not been fully elucidated. Various haematological and immunological parameters were evaluated in experimentally-infected goats showing typical signs of CAEV-induced disease. Infected goats showed recurrent lymphocytosis that may be due to constant presentation of antigen by infected cells of a monocyte/macrophage lineage. The serum alkaline phosphatase and gamma-glutamyl transferase concentrations were elevated in infected goats, a characteristic of hepatic and bone disorders. All other serum chemistry parameters were similar between infected and control goats. Importantly, the serum tumour necrosis factor-alpha (TNF-alpha) levels were higher in infected goats. The cachexia seen in infected goats may be at least partly due to altered metabolism as a result of prolonged elevation of serum TNF-alpha levels. Depressed natural killer cell activity was observed in infected goats and may contribute towards the establishment of a persistent infection with CAEV.