We report here an outbreak of an acute disease that caused high mortality rate in laboratory-reared tilapia larvae. The disease was initially observed in inbred gynogenetic line of blue tilapia larvae (Oreochromis aureus) and could be transmitted to larvae of other tilapia species. Based on the clinical manifestation (a whirling syndrome), we refer to the disease as viral encephalitis of tilapia larvae. The disease-associated DNA virus is described and accordingly designated tilapia larvae encephalitis virus (TLEV). A primary morphological, biophysical and molecular characterization of TLEV is presented. By virtue of these properties, the newly discovered virus is a herpes-like virus. Phylogenetic analysis, albeit limited, confirms this assumption and places TLEV within the family of Herpesviridae and distantly from the families Alloherpesviridae and Iridoviridae. By using PCR with virus-specific primers, diseased larvae and adult TLEV carriers were also identified in tilapia delivered from external hatcheries.