Following the demonstration that the tick-borne encephalitis (TBE) subgroup viruses are distributed as a cline across the Northern Hemisphere (Zanotto et al., 1995), we have analyzed the dispersal pattern of louping ill (LI) virus, the most westerly located member in the cline. A total number of 21 LI or LI-related virus E gene sequences have been used for a detailed molecular analysis of the evolution, phylogeny and geographical distribution of LI virus in the British Isles and Ireland. The results show that LI virus is genetically stable in general but minor differences enable its separation into four genetically distinct subtypes (genotypes) with clear geographical correlation, designated Type 1 in Scotland and England, Type 2 in Scotland, Type 3 in Wales and Type 4 in Ireland. These data demonstrate that geographically independent evolution of LI viruses has occurred. The molecular systematics and substitutional parameters analyses combined with the clinal distribution of the TBE virus complex allow the assignment of the origin for both Negishi (NEG) virus and a Norwegian isolate to the British Isles. Moreover, proposals for the classification of LI and LI-like viruses which cause encephalomyelitis in sheep, goat or cattle are presented.