Vertical transmission of the protozoan parasite, Neospora caninum is highly efficient and can take two forms – endogenous transplacental transmission resulting from activation of the quiescent bradyzoite stage during pregnancy or exogenous transplacental transmission resulting from ingestion of oocysts during pregnancy. Calves born carrying infection derived from either endogenous or exogenous transplacental transmission are capable of infecting their offspring when they start to breed. This review considers firstly the frequency with which exogenous and endogenous transmission occur, secondly the role of the immune response in controlling N. caninum infection and thirdly how the parasite persists in an immune-competent host and is re-activated during pregnancy.