Bacteroides fragilis with enterotoxin-like activity (BFEL) was isolated from the feces of 24- to 48-h-old lambs with acute diarrheal disease on three different sheep ranches in the Northern Rocky Mountain region of the United States. The lamb intestinal loop test was used to enrich for the bacterium before its initial isolation. Pure cultures of B. fragilis from the feces of diarrheic lambs caused fluid accumulation in five of five lamb intestinal loop tests and in three of three calf intestinal loop tests. Two different serogroups of BFEL were found in diarrheic lambs, and a third serogroups was found in the feces of a diarrheic ewe. Enteric disease characterized by diarrhea, depression, and inappetence occurred in three of eight newborn, colostrum-fed lambs after oral challenge inoculation with viable BFEL. One of the three lambs died 32 h after challenge. Clinical signs of disease were similar to those observed in the naturally occurring disease. B. fragilis is an obligately anaerobic bacterium found in the intestinal tract of most animals and humans. It is a serious cause of extraintestinal infection in humans. The bacterium has not been reported to cause fluid accumulation in the intestine or to cause diarrhea in any species of animal.