A group of 6- to 8-month-old calves developed head tremors, stiff gait, and staggering after consuming ryegrass straw that contained 3,711 micrograms of lolitrem-B/ kg. Signs were consistent with ryegrass staggers syndrome. At necropsy, all calves examined had atypical interstitial pneumonia, with marked emphysema and bullae. Infectious organisms and pneumotoxins were not identified. Experimentally, feeding the same ryegrass straw to age-matched calves induced similar neurologic signs, but did not result in pneumonic lesions. The high concentration of lolitrem-B in the straw or other, undefined factors, such as feed changes, may have contributed to the atypical interstitial pneumonia in the naturally exposed calves.