A population of free-ranging koalas in southeastern Queensland was examined to determine the prevalence of Chlamydia psittaci infections. Although C. psittaci was isolated from 46 of 65 (71%) koalas studied, only six (9%) of these had clinical signs of disease. Most adult females (82%) had back or pouch young present even though 67% of them were infected. There were no significant correlations between age, sex or site of sampling (urogenital versus conjunctival tissues) and the isolation of C. psittaci. No other important bacterial or fungal pathogens were isolated. The complement fixation test had a sensitivity of 7% and a specificity of 94% in detecting chlamydial infections, suggesting that it is unsuitable for use as a screening test. Chlamydia psittaci infection within this population appeared to represent a generally well-balanced host-parasite relationship and few animals had clinical signs of disease. Only four of 27 (15%) healthy koalas infected with C. psittaci followed for 24 wk after sampling developed eye disease or “dirty tail.” Two koalas with keratoconjunctivitis recovered without treatment during the study period. Additional factors, including the stresses imposed by loss of habitat, may act to produce overt disease in koalas with latent C. psittaci infections.