Transmissible spongiform encephalopathies (TSEs) or prion diseases often result in accumulation of disease-associated PrP (PrPd) in the lymphoreticular system (LRS), specifically in association with follicular dendritic cells (FDCs) and tingible body macrophages (TBMs) of secondary follicles. We studied the effects of sheep scrapie on lymphoid tissue in tonsils and lymph nodes by light and electron microscopy. FDCs of sheep were grouped according to morphology as immature, mature or regressing. Scrapie was associated with FDC dendrite hypertrophy and electron dense deposit or vesicles. PrPd was located using immunogold labelling at the plasmalemma of FDC dendrites and, infrequently, mature B cells. Abnormal electron dense deposits surrounding FDC dendrites were identified as immunoglobulins suggesting that excess immune complexes are retained and are indicative of an FDC dysfunction. Within scrapie-affected lymph nodes, macrophages outside the follicle and a proportion of germinal centre TBMs accumulated PrPd within endosomes and lysosomes. In addition, TBMs showed PrPd in association with the cell membrane, non-coated pits and vesicles, and also with discrete, large and random endoplasmic reticulum networks, which co-localised with ubiquitin. These observations suggest that PrPd is internalised via the caveolin-mediated pathway, and causes an abnormal disease-related alteration in endoplasmic reticulum structure. In contrast to current dogma, this study shows that sheep scrapie is associated with cytopathology of germinal centres, which we attribute to abnormal antigen complex trapping by FDCs and abnormal endocytic events in TBMs. The nature of the sub-cellular changes in FDCs and TBMs differs from those of scrapie infected neurones and glial cells suggesting that different PrPd/cell membrane interactions occur in different cell types.