Yellow-eyed penguins on Stewart Island were identified with a Leucocytozoon spp. of a novel lineage in association with a high regional incidence of chick mortality (n=32, 100% mortality) during the November 2006 to January 2007 breeding season. Fourteen chicks from Stewart Island were examined post-mortem and histologically for Leucocytozoon infection. In addition, a survey of blood to detect Leucocytozoon spp. infections using PCR was performed on 107 yellow-eyed penguins from 4 distinct nesting areas on the South Island (Oamaru, Otago Peninsula, and Catlins) (n=95), and Stewart Island (n=12). The results of the study revealed that 2 of the 14 (14%) chicks necropsied showed severe, disseminated megaloschizont formation in the liver, spleen, lung, kidney and other tissues characteristic of leucocytozoonosis. Eighty-three percent (83%) of blood samples collected from Stewart Island penguins contained Leucocytozoon DNA, whereas samples from the 3 other nesting areas were negative for the blood parasite. Leucocytozoon spp. DNA sequences isolated from blood and tissues of adults (n=10) and chicks (n=7) were similar and grouped with other published Leucocytozoon spp. sequences but in a distinct cluster together with closely related isolates from a Western march harrier (Circus aerginosus) and common loon (Gavia immer). These findings suggest that yellow-eyed penguins on Stewart Island are infected with a regionally isolated, host-specific Leucocytozoon spp. which may contribute to the high chick mortality observed during this period.