This paper describes an outbreak of chronic Senecio spp. poisoning in grazing sheep in Rio Grande do Sul, Brazil, causing the death of 10 out of 860 adult sheep. Eight sick ewes were euthanized and necropsied. Cattle from this farm were also affected. Clinical signs included progressive weight loss, apathy and photosensitization. Four out of seven tested sheep had increased gamma-glutamyl transferase serum activity and two of them presented serum elevation of alkaline phosphatase. At necropsy, three out of eight ewes presented slightly irregular toughened livers with multifocal nodules, two out of eight ewes had a whitish liver with thickened fibrotic Glisson's capsule partially adhered to the diaphragm, and three out of eight ewes had smooth and grossly normal livers. Necropsy findings attributed to liver failure included hydropericardium (7/8), ascites (5/8), icterus (2/8), hydrothorax (1/8), and edema of mesentery (1/8). The main hepatic histological findings that allowed the establishment of the diagnosis were megalocytosis, proliferation of bile ducts and fibrosis. Spongy degeneration was observed in the brains of all eight necropsied sheep and was more severe at the cerebellar peduncles, mesencephalon, thalamus, and pons. These are suggested as the portions of election to investigate microscopic lesions of hepatic encephalopathy in sheep with chronic seneciosis. The diagnosis of Senecio spp. poisoning was based on epidemiology, clinical signs, laboratory data, necropsy and histological findings.