Adult tapeworms and metacestodes of Echinococcus granulosus were found commonly in wildlife on Crown Land (Alpine National Park or State Forest) in the area around Mansfield, Victoria. A total of 756 sheep from 32 farms in the area were examined at slaughter. Seventeen of the farms (Group A) adjoined Crown Land and wild dogs commonly entered these farms and killed sheep. A high prevalence of hydatid infection was found in sheep from 15 of these farms. Serology and arecoline purging failed to identify infection with E. granulosus in any domestic dogs on these farms, despite some farmers sometimes feeding their dogs with offal of sheep and/or kangaroos. The remaining 15 farms (Group B) were in an area where wild dogs did not occur. Sheep infected with hydatid cysts were present on 2 farms in Group B, but E. granulosus infection was not evident in wildlife species examined from this area. The only sheepdog to have detectable serum antibodies against E. granulosus was a dog from a farm separating the 2 Group B farms where infected sheep were found. Echinococcus granulosus were not found when this dog was purged. The implications of the results of this study are discussed in terms of transmission and control.