The leukotoxin of Pasteurella (Mannheimia)haemolytica is believed to play a significant role in pathogenesis, causing cell lysis and apoptosis that lead to the lung pathology characteristic of bovine shipping fever. Using a system for Cre-lox recombination, a nonpolar mutation within thelktC transacylase gene of the leukotoxin operon was created. The lktC locus was insertionally inactivated using a loxP-aph3-loxP cassette, and then the aph3marker was excised from the chromosome by Cre recombinase expressed from a P. haemolytica plasmid. The resultinglktC strain (SH2099) secretes inactive leukotoxin and carries no known antibiotic resistance genes. Strain SH2099 was tested for virulence in a calf challenge model. We inoculated 3 × 10⁸ or 3 × 10⁹ CFU of wild-type or mutant bacteria into the lungs of healthy, colostrum-deprived calves via transthoracic injection. Animals were observed for clinical signs and for nasal colonization for 4 days, after which they were euthanized and necropsied. The lower inoculum (3 × 10⁸ CFU) caused significantly fewer deaths and allowed lung pathology to be scored and compared, while the 3 × 10⁹ CFU dose of either the wild-type or mutant was lethal to ≥50% of the calves. The estimated 50% lethal dose of SH2099 was four times higher than that of the wild-type strain. Lung lesion scores were reduced twofold in animals inoculated with the mutant, while clinical scores were nearly equivalent for both strains. The wild-type and mutant strains were equally capable of colonizing the upper respiratory tracts of the calves. In this study, the P. haemolytica lktC mutant was shown to be less virulent than the parent strain.