Rabies is an important zoonotic disease with high fatality rates in animals and humans. In the Arctic, the Arctic fox (Vulpes lagopus) is regarded as the principal reservoir, but there is considerable debate about how the disease persists at the low population densities that are typical for this species. We describe an outbreak of rabies among Arctic foxes and Svalbard reindeer (Rangifer tarandus platyrhynchus) during 2011–12 on the remote Arctic archipelago of Svalbard, an area with a very low and relatively stable Arctic fox density. The aim of the research was to increase knowledge of Arctic rabies in this ecosystem and in the presumed spillover host, the Svalbard reindeer. Phylogenetic analysis of rabies virus (RABV) RNA isolates from Arctic fox and reindeer was performed, and clinical observations and histologic and immunohistochemical findings in reindeer were described. An ongoing capture-mark-recapture project allowed collection of serum samples from clinically healthy reindeer from the affected population for detection of rabies virus–neutralizing antibodies. The outbreak was caused by at least two different variants belonging to the RABV Arctic-2 and Arctic-3 clades, which suggests that rabies was introduced to Svalbard on at least two different occasions. The RABV variants found in Arctic fox and reindeer were similar within locations, suggesting that Arctic foxes and reindeer acquired the infection from the same source(s). The histopathologic and immunohistochemical findings in 10 reindeer were consistent with descriptions in other species infected with RABV of non-Arctic lineages. Evidence of RABV was detected in both brain and salivary gland samples. None of 158 examined serum samples from clinically healthy reindeer had virus-neutralizing antibodies against RABV.