Pseudocowpox virus is a parapoxvirus frequently associated with papulovesicular and scabby lesions on the teats and udders of milking cows and is often transmitted to human beings. An unusual outbreak of skin disease in fattening calves in southern Brazil is described. Fourteen of 17 male cattle (82%), aged 6–48 months, feeding on grass pastures were affected. Animals developed papules, vesicles, and scabby proliferative lesions on the muzzle in a clinical course of approximately 10–15 days. The scabby lesions often presented with exudation and bleeding. Histological examination of mucocutaneous tissue in detached scabs revealed acanthosis with thickening of the corneal layer and premature keratinization (parakeratotic hyperkeratosis). The dermis had multifocal lymphoplasmacytic infiltrates. Electron microscopic examination of scab specimens revealed typical parapoxvirus particles: oval shaped (260 nm × 160 nm), enveloped, and covered with a helical layer. Polymerase chain reaction using a set of pan-parapoxvirus primers for the B2L gene amplified a 590-bp product out of DNA extracted from scabs. Nucleotide sequencing of the amplicons revealed a nucleotide homology of 97% with Pseudocowpox virus and lower homology with other parapoxviruses: Bovine papular stomatitis virus (84%) and Orf virus (94%). A phylogenetic tree based on the B2L sequence was constructed, showing that the virus clustered with Pseudocowpox virus isolates.