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From 1992 onwards, outbreaks of a previously unknown illness have been reported in Asian seabass (Lates calcarifer) kept in maricultures in Southeast Asia. The most striking symptom of this emerging disease is the loss of scales. It was referred to as scale drop syndrome, but the etiology remained enigmatic. By using a next-generation virus discovery technique, VIDISCA-454, sequences of an unknown virus were detected in serum of diseased fish. The near complete genome sequence of the virus was determined, which shows a unique genome organization, and low levels of identity to known members of the Iridoviridae. Based on homology of a series of putatively encoded proteins, the virus is a novel member of the Megalocytivirus genus of the Iridoviridae family. The virus was isolated and propagated in cell culture, where it caused a cytopathogenic effect in infected Asian seabass kidney and brain cells. Electron microscopy revealed icosahedral virions of about 140 nm, characteristic for the Iridoviridae. In vitro cultured virus induced scale drop syndrome in Asian seabass in vivo and the virus could be reisolated from these infected fish. These findings show that the virus is the causative agent for the scale drop syndrome, as each of Koch’s postulates is fulfilled. We have named the virus Scale Drop Disease Virus. Vaccines prepared from BEI- and formalin inactivated virus, as well as from E. coli produced major capsid protein provide efficacious protection against scale drop disease.