The population of red squirrels (Sciurus vulgaris) in the British Isles is in decline and is being supplanted by the grey squirrel (Sciurus carolinensis). It has been suggested that parapoxvirus-associated disease has caused significant mortality in red squirrels and that grey squirrels are the source of the virus. A direct enzyme-linked immunosorbent assay (ELISA) was developed for the measurement of antibody to squirrel parapoxvirus. We tested 140 sera from red squirrels and 223 from grey squirrels from different populations in the UK. A high percentage (61%) of apparently healthy grey squirrels, were found to have been exposed to the parapoxvirus. Only 2.86% (4/140) of red squirrels had antibody and three of these animals had parapoxvirus-associated disease. We postulate that the grey squirrel may act as a reservoir host for the virus.