We investigated the effects of pharmacological and lentivirus-induced immunosuppression on bluetongue virus (BTV) pathogenesis as a mechanism for virus persistence and induction of clinical disease. Immunologically normal and immunosuppressed sheep were infected subcutaneously with BTV serotype 3 (BTV-3), a foreign isolate with unknown pathogenicity in North American livestock, and with North American serotype 11 (BTV-11). Erythrocyte-associated BTV RNA was detected earlier and at greater concentrations in sheep treated with immunosuppressive drugs. Similarly, viral RNA and infectious virus were detected in blood monocytes earlier and at higher frequency in immunosuppressed animals: as many as 1 in 970 monocytes revealed BTV RNA at peak viremia, compared to <1 in 10⁵ monocytes from immunocompetent sheep. Animals infected with BTV-3 had a higher virus burden in monocytes and lesions of greater severity than those infected with BTV-11. BTV RNA was detected by in situ hybridization in vascular endothelial cells and cells of monocyte lineage, but only in tissues from immunocompromised animals, and was most abundant in animals infected with BTV-3. In contrast, reverse transcription-in situ PCR showed BTV RNA from both viral serotypes in high numbers of tissue leukocytes and vascular endothelial cells from both immunosuppressed and, to a lesser extent, immunocompetent animals. Collectively, these findings show that BTV infection is widely distributed during acute infection but replication is highly restricted in animals with normal immunity. These findings also suggest that in addition to virulence factors that define viral serotypes, immunosuppression could play a role in the natural history of orbivirus infection, allowing for higher virus burden, increased virus persistence, and greater potential for acquisition of virus by the arthropod vector.