The fungi that cause club lamb fungus grow on tissues containing keratin. Infection begins when spores from the fungus enter the skin and start to grow. Washing and shearing remove lanolin that helps protect the sheep's skin. Lanolin is a natural body oil found on sheep. Nicks and cuts from shearing allow the fungus to enter the skin and begin infection.
Infection is characterized by hairless, scaly lesions.
These begin as spots and expand up to 2 inches in diameter 2 to 4 weeks after infection. The lesions are typically found on the face and ears of open-faced sheep and appear as hairless, scaly spots. When located on the body they look like matted areas in the fleece. The infected portion of the fleece is below the skin. These pustules appear ulcerated if the scabs and wool are removed.