An outbreak of Chlamydophila psittaci occurred in an outdoor colony of 63 Magellanic penguins (Spheniscus magellanicus) at the San Francisco Zoo. Affected penguins presented with inappetence, lethargy, and light green urates. Hematologic and serum biochemical findings were consistent with chronic inflammation. Penguins did not respond to initial supportive and antimicrobial therapy, and 3 died. Necropsy results of the 3 birds revealed hepatomegaly and splenomegaly, and histologic lesions included necrotizing hepatitis, splenitis, and vasculitis. Chlamydophila psittaci infection was confirmed by results of Gimenez staining, immunohistochemistry, and tissue polymerase chain reaction assay. As additional birds continued to present with similar clinical signs, the entire colony of penguins was prophylactically treated with a 30-day minimum course of doxycycline, administered orally or intramuscularly or as a combination of both. Despite treatment, 9 additional penguins died during a 3-month period. Pathologic results from these birds revealed renal and visceral gout (n = 4), cardiac insufficiency (n = 2), sepsis from a suspected esophageal perforation (n = 2), and no gross lesions (n = 1). During the outbreak, 4 birds presented with seizures, 5 developed dermatitis, and nearly 90% of birds in the colony showed severe keratoconjunctivitis, believed to be related to drug therapy with doxycycline. We report the clinical and pathologic features of Chlamydophila psittaci infection in an outdoor colony of penguins and the associated challenges of treatment.