One of the main activities at the Gondol Research Station for Coastal Fisheries (GRSCF), Bali, Indonesia is to disseminate the skills for the reproduction and growth of humpback grouper, Cromileptes altivelis to private hatcheries in Indonesia, which is conducted under the Indonesia/Japan technical cooperation project. Since 1998, several private hatcheries in Bali and east Java have attempted to produce juveniles of humpback grouper. However, in November 1998, mass mortality of larvae and juveniles of humpback grouper occurred at a hatchery near the Station. The present paper describes the cause of the mortality that occurred at that time. Based on the histopathological features in the eyes and brain of the diseased fish, the morphology of the detected virus and positive result of PCR in detecting the SJNNV gene, the mass mortality in humpback grouper could be diagnosed as viral nervous necrosis (VNN). In the challenge experiment, the fish exposed to the viral filtrate showed the characteristic symptoms of VNN.