M141R is a myxoma virus gene that encodes a cell surface protein with significant amino acid similarity to the family of cellular CD200 (OX-2) proteins implicated in the regulation of myeloid lineage cell activation. The creation of an M141R deletion mutant myxoma virus strain (vMyx141KO) and its subsequent infection of European rabbits demonstrated that M141R is required for the full development of a lethal infection in vivo but is not required for efficient virus replication in susceptible cell lines in vitro. Minor secondary sites of infection were detected in the majority of rabbits infected with the M141R deletion mutant, demonstrating that the M141R protein is not required for the dissemination of virus within the host. When compared to wild-type myxoma virus-infected rabbits, vMyx141KO-infected rabbits showed higher activation levels of both monocytes/macrophages and lymphocytes in situ through assessments of inducible nitric oxide synthase-positive and CD25(+) infiltrating cells in infected and lymphoid tissues. Purified peripheral blood mononuclear cells from vMyx141KO-infected rabbits demonstrated an increased ability to express gamma interferon upon activation by phorbol myristate acetate plus ionomycin compared to cells purified from wild-type myxoma virus-infected rabbits. We concluded that the M141R protein is a bona fide CD200-like immunomodulator protein which is required for the full pathogenesis of myxoma virus in the European rabbit and that its loss from the virus results in increased activation levels of macrophages in infected lesions and draining lymph nodes as well as an increased activation level of circulating T lymphocytes during infection. We propose a model whereby M141R transmits inhibitory signals to tissue macrophages, and possibly resident CD200R(+) dendritic cells, that reduce their ability to antigenically prime lymphocytes and possibly provides anergic signals to T cells directly.