Introduction: Bovine leukaemia virus (BLV) naturally infects cattle, but can also be transmitted experimentally to sheep. Infection is accompanied by a long latency period in which the animal is in an aleukaemic state and, after a few years, acute leukaemia develops in sheep or persistent leucocytosis in cows. The aim of this study was to investigate how the virus evades immune detection in such animals. Materials and Methods: Flow cytometry analysis of T-cell activation in sheep infected with BLV by assessment of CD25 expression on T helper cells and T cytotoxic cells. Enzyme linked immunosorbent assay for determination of the concentrations of the immunosuppressive cytokines transforming growth factor (TGF)-β1 and interleukin (IL)-10. Results: Percentages of CD4+CD25+ cells and CD8+CD25+ cells were not significantly different in control (43.6% and 7.28%; n = 9), latently infected (43.4% and 5.77%; n = 9) and leukaemic (34% and 3.07%; n = 6) groups. Concentration of TGF-β1 in plasma was highest in the latently infected group (129.5 ng/ml) in comparison with the control (76.54 ng/ml) and the leukaemic (47.03 ng/ml) group. Concentration of IL-10 in plasma was lowest in the leukaemic group (6.8 pg/ml) in comparison with the latently infected group (7.5 pg/ml) and the control group (8.12 pg/ml). Conclusions: BLV induces TGF-β1 secretion at an early stage after infection and during the latency period. TGF-β1 inhibits the expression levels of IL-2 receptor (CD25) on T cells, downregulating their activity. The high level of TGF-β1 in the plasma of infected sheep could explain a non-effective immune response resulting in an inability to totally eliminate virus, but this is not sufficient to explain neoplastic transformation.