A microsporidian of the genus Loma was noted in the gills of rainbow trout Oncorhynchus mykiss from a state hatchery (Buford Trout Hatchery) in Georgia. Mortalities of varying severity occur at this hatchery every fall, and the microsporidian was noted during an experiment from August 1991 to January 1992 to determine the effects of water source on disease. Infections first appeared to be systemic in the October sample; xenomas were observed in heart, spleen, and peripheral vessel walls. The presence of unidentified intracellular material preceded the appearance of xenomas in all tissues, but whether this material was associated with inflammation or represented immature stages of the parasite has yet to be determined. These structures were also noted in the intestine and liver, although xenomas were not noted in these organs. Mature xenomas did not elicit an inflammatory response but appeared to be short-lived. When the xenoma wall ruptured and released spores, an inflammatory response was again observed. The prevalence and severity of the infection were determined in fish maintained in troughs with well water, Chattahoochee River water, or hatchery (treated river) water. The infection tended to be more prevalent and more severe in fish maintained in the hatchery or river water than in those maintained in the well water. Stress induced by poor water quality may increase mortality from this parasite. This report extends the range of Loma sp. into the eastern United States.