Piscine orthoreovirus (PRV) belongs to the Reoviridae family and is the only known fish virus related to the Orthoreovirus genus. The virus is the causative agent of heart and skeletal muscle inflammation (HSMI), an emerging disease in farmed Atlantic salmon (Salmo salar L.). PRV is ubiquitous in farmed Atlantic salmon and high loads of PRV in the heart are consistent findings in HSMI. The mechanism by which PRV infection causes disease remains largely unknown. In this study we investigated the presence of PRV in blood and erythrocytes using an experimental cohabitation challenge model. We found that in the early phases of infection, the PRV loads in blood were significantly higher than in any other organ. Most virus was found in the erythrocyte fraction, and in individual fish more than 50% of erythrocytes were PRV-positive, as determined by flow cytometry. PRV was condensed into large cytoplasmic inclusions resembling viral factories, as demonstrated by immunofluorescence and confocal microscopy. By electron microscopy we showed that these inclusions contained reovirus-like particles. The PRV particles and inclusions also had a striking resemblance to previously reported viral inclusions described as Erythrocytic inclusion body syndrome (EIBS). We conclude that the erythrocyte is a major target cell for PRV infection. These findings provide new information about HSMI pathogenesis, and show that PRV is an important factor of viral erythrocytic inclusions.