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Background: Mycoplasma agalactiae is the main cause of contagious agalactia, a serious disease of sheep and goats, which has major clinical and economic impacts. Previous studies of M. agalactiae have shown it to be unusually homogeneous and there are currently no available epidemiological techniques which enable a high degree of strain differentiation., Results: We have developed variable number tandem repeat (VNTR) analysis using the sequenced genome of the M. agalactiae type strain PG2. The PG2 genome was found to be replete with tandem repeat sequences and 4 were chosen for further analysis. VNTR 5 was located within the hypothetical protein MAG6170 a predicted lipoprotein. VNTR 14 was intergenic between the hypothetical protein MAG3350 and the hypothetical protein MAG3340. VNTR 17 was intergenic between the hypothetical protein MAG4060 and the hypothetical protein MAG4070 and VNTR 19 spanned the 5' end of the pseudogene for a lipoprotein MAG4310 and the 3' end of the hypothetical lipoprotein MAG4320. We have investigated the genetic diversity of 88 M. agalactiae isolates of wide geographic origin using VNTR analysis and compared it with pulsed field gel electrophoresis (PFGE) and random amplified polymorphic DNA (RAPD) analysis. Simpson's index of diversity was calculated to be 0.324 for PFGE and 0.574 for VNTR analysis. VNTR analysis revealed unexpected diversity within M. agalactiae with 9 different VNTR types discovered. Some correlation was found between geographical origin and the VNTR type of the isolates., Conclusion: VNTR analysis represents a useful, rapid first-line test for use in molecular epidemiological analysis of M. agalactiae for outbreak tracing and control.