Eighty-one of 95 BaLB/c nude mice infected intracranially with the LID strain of polyomavirus developed tumors of the vertebrae which compressed the spinal cord or peripheral nerves and produced paralysis. Wallerian degeneration was the only pathological alteration found in the nervous system of polyoma-infected mice. While polyomavirus was demonstrated in the brain and spinal cord by viral isolation and immunoperoxidase staining, no evidence of a primary demyelinating process was found. The disease produced in the present study is not a satisfactory animal model of progressive multifocal leukoencephalopathy.