This article by Terrance Rephann, a regional economist at the Weldon Cooper Center for Public Service, reports the results of a comprehensive study that examined the economic impact of Virginia’s horse industry. The spending associated with horse owners, commercial horse operations, out-of-state show and race participants, and horse event spectators constitutes the direct contribution to the state’s economy. Linkages with other industries in Virginia’s supply chain mean that this spending has further stimulative effects that result from the purchases of goods and services and payments to employees. The Virginia horse industry has increased in size and economic influence over the past few decades because of the continued growth in the Virginia horse population and associated horse spending, introduction of racing at Colonial Downs in 1997, and an expansion in the Virginia show and competition calendar fostered in part by public investments such as the Virginia Horse Center in Lexington which opened in 1987. The Virginia racing industry, which is the smallest of the three components, grew until 2007 but experienced a contraction in attendance and wagering after then because of competitive pressures and the effects of the recent recession on consumer spending. While the downturn may have damped horse spending, as economic growth resumes and consumer spending on recreation and leisure increases, the industry is likely to expand and benefit.