Epizootic outbreaks of congenital malformations in sheep are rare and have, to the best of our knowledge, never been reported before in Europe. This paper describes relevant preliminary findings from the first epizootic outbreak of ovine congenital malformations in the Netherlands. Between 25 November and 20 December 2011, congenital malformations in newborn lambs on sheep farms throughout the country were reported to the Animal Health Service in Deventer. Subsequently, small ruminant veterinary specialists visited these farms and collected relevant information from farmers by means of questionnaires. The deformities varied from mild to severe, and ewes were reported to have given birth to both normal and deformed lambs; both male and female lambs were affected. Most of the affected lambs were delivered at term. Besides malformed and normal lambs, dummy lambs, unable to suckle, were born also on these farms. None of the ewes had shown clinical signs during gestation or at parturition. Dystocia was common, because of the lambs' deformities. Lambs were submitted for post-mortem examination, and samples of brain tissue were collected for virus detection. The main macroscopic findings included arthrogryposis, torticollis, scoliosis and kyphosis, brachygnathia inferior, and mild-to-marked hypoplasia of the cerebrum, cerebellum and spinal cord. Preliminary data from the first ten affected farms suggest that nutritional deficiencies, intoxication, and genetic factors are not likely to have caused the malformations. Preliminary diagnostic analyses of precolostral serum samples excluded border disease virus, bovine viral diarrhoea virus, and bluetongue virus. In December 2011, samples of brain tissue from 54 lambs were sent to the Central Veterinary Institute of Wageningen University Research, Lelystad. Real-time PCR detected the presence of a virus, provisionally named the Schmallenberg virus, in brain tissue from 22 of the 54 lambs, which originated from seven of eight farms that had submitted lambs for post-mortem examination. This Schmallenberg virus was first reported in Germany and seems to be related to the Shamonda, Aino, and Akabane viruses, all of which belong to the Simbu serogroup of the genus Orthobunyavirus of the family Bunyaviridae. These preliminary findings suggest that the Schmallenberg virus is the most likely cause of this epizootic of ovine congenital malformations, which is the first such outbreak reported in Europe.