The equine sarcoid, a locally aggressive, fibroblastic skin tumour, is the most common dermatological neoplasm reported in horses; there is no consistently effective therapy. It is widely accepted that bovine papillomavirus (BPV) types 1 and 2 are associated with the pathogenesis of sarcoid disease. Most sarcoids appear to contain detectable viral DNA and RNA and are also known to express the BPV types 1 and 2 major transforming protein, E5, but appear not to produce infectious virions. While the mode of transmission of infection has not been elucidated, viral gene expression, in particular of E5, may contribute to virus persistence and disease pathogenesis by downregulating MHC class I expression. Here, the pathology and epidemiology of the sarcoid and its association with BPV is reviewed; the transforming functions of the BPV oncoproteins and their possible role in sarcoid pathogenesis are discussed; and the practical implications of BPV infection for diagnostic and therapeutic purposes are considered.