A 15-cm segment of small intestine from a 7-wk-old broiler chicken presented for slaughter was encased by a firm, white mass. Other tissues were grossly unremarkable. Microscopically, the enteric serosa and peripheral muscularis of this segment of small intestine were replaced by a fibrosarcoma. Numerous linear, intracytoplasmic, eosinophilic inclusion bodies were present in smooth muscle cells of the muscularis of the small intestine, and a few similar inclusions were present in the muscularis of the proventriculus. In the heart, there were rare intracytoplasmic inclusions typical of viral matrix inclusions. Ultrastructurally, inclusion bodies in enteric smooth muscle were viral matrix inclusions, and virions resembling avian retroviruses were present in adjacent intercellular spaces. Polymerase chain reaction (PCR) of the deoxyribonucleic acid (DNA) extracted from tumor tissues indicated the presence of proviral DNA of subgroup J avian leukosis virus. This is the first description of the light microscopic appearance of these viral matrix inclusions in enteric smooth muscle.