The ecology of virulent strains of Rhodococcus equi on horse farms is likely to influence the prevalence and severity of R. equi pneumonia in foals. This study examined the association between the ecology of virulent R. equi and the epidemiology of R. equi pneumonia by collecting air and soil samples over two breeding seasons (28 farm-year combinations) on Thoroughbred breeding farms with different reported prevalences of R. equi pneumonia. Colony blotting and DNA hybridization were used to detect and measure concentrations of virulent R. equi. The prevalence of R. equi pneumonia was associated with the airborne burden of virulent R. equi (both the concentration and the proportion of R. equi bacteria that were virulent) but was not associated with the burden of virulent R. equi in the soil. Univariable screening and multivariable model building were used to evaluate the effect of environmental and management factors on virulent R. equi burdens. Lower soil moisture concentrations and lower pasture heights were significantly associated with elevated airborne concentrations of virulent R. equi, as were the holding pens and lanes, which typically were sandy, dry, and devoid of pasture cover. Few variables appeared to influence concentrations of virulent R. equi in soil. Acidic soil conditions may have contributed to an elevated proportion of virulent strains within the R. equi population. Environmental management strategies that aim to reduce the level of exposure of susceptible foals to airborne virulent R. equi are most likely to reduce the impact of R. equi pneumonia on endemically affected farms.