The interaction between sheep and the nematode Teladorsagia circumcincta is one of the best understood of all host-parasite interactions. Following infection, there is considerable variation among lambs in the number of nematode eggs produced, the number of early fourth-stage larvae and the number of adult worms in the mucosa. These traits have a high variance to mean ratio (i.e. they are overdispersed or aggregated among hosts), they are skewed and approximately negative binomially distributed. The sources of overdispersion are differences among lambs in the ingestion of infective larvae and the immune response. Both forces can produce aggregation but their relative importance is unknown. The key components of variation can be identified by variance analysis. The sum of the average effects of polymorphic genes is known as additive genetic variation and this increases essentially from zero at one month of age to quite high values at six months of age. The major mechanism underlying genetic variation appears to be the differences among individuals in immune responses. Two of the major sources of variation in immune responses are differences in antigen recognition and differences in the type of cytokines produced. Genes that influence both these sources of variation are associated with differences in resistance to nematode infection. Therefore, much of the heterogeneity among animals in parasite transmission appears to be due to genetic variation in immune responsiveness.