An outbreak of giardiasis was observed in a sheep farm in Central Italy. Infected lambs (30–90 days of age) showed a malabsorption syndrome, decreased weight gain and impairment in feed efficiency. The most relevant clinical sign was the excretion of malodorous and poorly formed faeces, whereas diarrhoea was rarely observed in the flock. Laboratory investigations revealed the presence of Giardia in affected animals, while no other significant viral, bacterial or parasitic pathogens were identified in faeces or tissue samples. A mild to severe infiltrative enteritis with eosinophils, lymphocytes and plasma cells was detected in histological sections of the gut. Giardia parasites collected from duodenal aspirates were typed as Giardia duodenalis Assemblage B, by PCR amplification and sequencing of the TPI gene. Treatment with fenbendazole at a dose of 10 mg/kg for 3 consecutive days, successfully cleared the infection. These results show that G. duodenalis can cause significant economic losses in sheep farming.