After the outbreak of Nipah virus (NiV) in 1998-99, which resulted in 105 human deaths and the culling of more than one million pigs, a search was initiated for the natural host reservoir of NiV on Tioman Island off the east coast of Malaysia. Three different syncytia-forming viruses were isolated from fruit bats on the island. They were Nipah virus, Tioman virus (a novel paramyxovirus related to Menangle virus), and a reovirus, named Pulau virus (PuV), which is the subject of this study. PuV displayed the typical ultra structural morphology of a reovirus and was neutralised by serum against Nelson Bay reovirus (NBV), a reovirus isolated from a fruit bat (Pteropus poliocephalus) in Australia over 30 years ago. PuV was fusogenic and formed large syncytia in Vero cells. Comparison of dsRNA segments between PuV and NBV showed distinct mobility differences for the S1 and S2 segments. Complete sequence analysis of all four S segments revealed a close relationship between PuV and NBV, with nucleotide sequence identity varying from 88% for S3 segment to 56% for the S1 segment. Similarly phylogenetic analysis of deduced protein sequences confirmed that PuV is closely related to NBV. In this paper we discuss the similarities and differences between PuV and NBV which support the classification of PuV as a novel mammalian, fusogenic reovirus within the Nelson Bay orthoreovirus species, in the genus Orthoreovirus, family Reoviridae.