LEXINGTON, Ky. -- Scientists trying to identify the mysterious illness that is killing newborn horses and threatening Kentucky's thoroughbred industry are looking at caterpillars as a possible culprit.

Experts have been working around the clock for the past three weeks to figure out why a startling number of foals are dying and mares are suffering spontaneous abortions.

Initially, mold- or fungus-based toxins in pasture grasses were a primary suspect. Now, researchers are focusing more of their attention on the fuzzy, black and green Eastern tent caterpillar, which was found at abnormally high levels on farms throughout the region this spring.

One possibility is that the caterpillar somehow transmitted a toxin to the horses.

"Although there are still a variety of possible causal agents being considered, more emphasis is being placed on the caterpillars," Carla Craycraft of the University of Kentucky College of Agriculture, said Tuesday.

Scientists first theorized that Kentucky's warm, dry spring followed by several hard freezes and subsequent dry weather fostered the growth of toxins in the grass eaten by pregnant mares in the nation's No. 1 thoroughbred state.

Initial tests on grasses from several area farms, however, have produced negative results for major mycotoxins such as zearalenone, which is known to cause reproductive problems in horses.

Tent caterpillars feed on wild cherry tree leaves, which are highly poisonous and can produce cyanide-like toxins in the caterpillars' stomachs, Craycraft said. Early tests on the caterpillars were negative for cyanide, but later tests indicated abnormal levels of zearalenone.

"At this point, we don't know how the toxins gather in the caterpillars or how that may affect the horses," said Scott Smith, dean of the UK College of Agriculture. "And now that the caterpillars aren't really around anymore, it may be difficult to establish a concrete link."

Wild cherry trees have been identified on several farms where affected mares had grazed, but researchers still do not know if there is a one-to-one correlation between the presence of cherry trees and caterpillars and incidence of the syndrome, Craycraft said.

Information posted to the College of Agriculture's Web site Tuesday night indicated that heavy infestations of tent caterpillars were reported throughout central Kentucky this spring and last.

The last heavy infestations occurred across the state in 1979, 1980 and 1981, the last time the region suffered an unexplained sharp increase in the number of early fetal losses in mares, the report said.

The region also experienced extreme weather conditions during the spring months of those years, similar to what central Kentucky experienced this year, the report said. No causal agent for the 1980-81 fetal losses was ever determined.

Not every expert is ready to abandon the mycotoxin theory.

"I think it's very unlikely that it is the tent caterpillars, but they have to be looked at just like the mycotoxins," said Dr. Bill Bernard, internal medicine specialist at Rood and Riddle Equine Hospital in Lexington.

"We had extreme weather conditions this spring and an extreme incidence of caterpillars, and anything that is out of the ordinary obviously needs to be considered suspect and looked at closely."

A total of 529 dead foals have been delivered to the Gluck Equine Research Center in Lexington since April 28.

Current estimates are that the syndrome may have claimed up to 6 percent of this year's expected crop of nearly 10,000 foals and as much as 25 percent of the 2002 crop, which could cost Kentucky's billion-dollar thoroughbred industry hundreds of millions of dollars.