Ovine herpesvirus 2 (OvHV-2), a rhadinovirus in the subfamily Gammaherpesvirinae, is the causative agent of sheep-associated malignant catarrhal fever (SA-MCF), a frequently fatal lymphoproliferative disease primarily of ruminants worldwide. Inability to propagate the virus in vitro has made it difficult to study OvHV-2 replication. Aerosol inoculation of sheep with OvHV-2 from nasal secretions collected from naturally infected sheep during shedding episodes results in infection of naive sheep, providing an excellent system to study OvHV-2 initial replication in the natural host. In this study, we showed that OvHV-2 delivered through the nasal route by nebulization resulted in infection in all lambs, but no infection was established in any lambs after intravenous or intraperitoneal injection. In nebulized lambs, while it was not detected initially in any other tissues, OvHV-2 DNA became detectable in the lung at 3 days post-infection (p.i.), increased to about 900 copies per 50 ng DNA at 5 days p.i., reached peak levels ( approximately 7500 copies) at 7 days p.i., and then declined to an average of 800 copies at 9 days p.i. Transcripts of OvHV-2 open reading frame 25 (coding for the capsid protein), an indicator of virus replication, were only detected in lung tissues, and were positively correlated with OvHV-2 DNA levels in the lungs. In addition, selected immune response genes were also highly expressed in the lung at 5 and 7 days p.i. The data indicate that lung is the primary replication site for OvHV-2 during initial infection in sheep and suggest that viral replication is promptly controlled by a host defence mechanism.