Abstract. Recently, Ruan and Wang [J. Differential Equations, 188 (2003), pp. 135-163] studied the global dynamics of a SIRS epidemic model with vital dynamics and a nonlinear saturated incidence rate. Under certain conditions they showed that the model undergoes a Bogdanov-Takens bifurcation; i.e., it exhibits saddle-node, Hopf, and homoclinic bifurcations. They also considered the existence of none, one, or two limit cycles. In this paper, we investigate the coexistence of a limit cycle and a homoclinic loop in this model. One of the difficulties is to determine the multiplicity of the weak focus. We first prove that the maximal multiplicity of the weak focus is 2. Then feasible conditions are given for the uniqueness of limit cycles. The coexistence of a limit cycle and a homoclinic loop is obtained by reducing the model to a universal unfolding for a cusp of codimension 3 and studying degenerate Hopf bifurcations and degenerate Bogdanov-Takens bifurcations of limit cycles and homoclinic loops of order 2. In most epidemic models (see Anderson and May [3]), the incidence rate (the number of new cases per unit time) takes the mass-action form with bilinear interactions, namely, κS(t)I(t), where S(t) and I(t) are the numbers of susceptible and infectious individuals at time t, respectively, and the constant κ is the probability of transmission per contact. Epidemic models with such bilinear incidence rates usually have at most one endemic equilibrium and do not exhibit periodicity; the disease will be eradicated if the basic reproduction number is less than one and will persist otherwise (Anderson and May [3], Hethcote [11]). There are many reasons for using nonlinear incidence rates, and various forms of nonlinear incidence rates have