Infection by the parapoxvirus orf virus causes proliferative skin lesions in which extensive capillary proliferation and dilation are prominent histological features. This infective phenotype may be linked to a unique virus-encoded factor, a distinctive new member of the vascular endothelial growth factor (VEGF) family of molecules. We constructed a recombinant orf virus in which the VEGF-like gene was disrupted and show that inactivation of this gene resulted in the loss of three VEGF activities expressed by the parent virus: mitogenesis of vascular endothelial cells, induction of vascular permeability, and activation of VEGF receptor 2. We used the recombinant orf virus to assess the contribution of the viral VEGF to the vascular response seen during orf virus infection of skin. Our results demonstrate that the viral VEGF, while recognizing a unique profile of the known VEGF receptors (receptor 2 and neuropilin 1), is able to stimulate a striking proliferation of blood vessels in the dermis underlying the site of infection. Furthermore, the data demonstrate that the viral VEGF participates in promoting a distinctive pattern of epidermal proliferation. Loss of a functional viral VEGF resulted in lesions with markedly reduced clinical indications of infection. However, viral replication in the early stages of infection was not impaired, and only at later times did it appear that replication of the recombinant virus might be reduced.