The pathogenesis of the persistent progressive diseases of sheep (visna-maedi) and goats (arthritis-encephalitis) is dependent on continuous replication of the causative lentiviruses. One subgroup of these viruses, Icelandic visna virus, accomplishes this form of replication by undergoing antigenic mutation. Mutant viruses arising late in the infection escape neutralization by antibodies directed to the parental virus. In contrast, we show here that viruses obtained from persistently infected sheep and goats with natural disease in this country do not induce virus-neutralizing antibodies, although antibodies to virus core proteins were produced. The lack of neutralizing antibodies was not overcome by hyperimmunization of animals with concentrated preparations of live or inactivated virus. Thus, failure to produce these specific antibodies was not due to lack of sufficient antigen or interference with the immune response because of the ability of these viruses to infect macrophages. The hyporesponsive state, however, was overcome by immunization of animals with virus and large amounts of inactivated Mycobacterium tuberculosis. Induction of agglutinating and neutralizing antibodies by this method was probably due to a unique form of antigen processing by macrophages activated by M. tuberculosis. Neutralizing antibodies were produced for the first time against the caprine arthritis-encephalitis virus by this method. These antibodies have similar biological properties to those induced by Icelandic visna virus. They belong to the immunoglobulin G1 subclass, they are effective against a narrow range of caprine arthritis-encephalitis viruses, and they identify (for the first time) antigenic variants among these caprine agents.