Rickettsial organisms are well-known fish pathogens in both natural and culture environments. This study reports an outbreak of disease in red tilapia larvae caused by piscirickettsia-like organisms (PLOs), which lasted from June until October 2009. Severe mortality was recorded almost exclusively in larvae and postlarvae aged 1–22 days old. Although clinical or gross findings were not evident in diseased fish, histopathology revealed severe necrosis of the epidermis and gill epithelium, with concomitant changes in the underlying skeletal muscle as being the most relevant microscopic lesions. Although PLOs were visible with the routine hematoxylin eosin technique, they were better observed with Giemsa and toluidine blue stains. Transmission electron microscopy revealed that the bacterium was located within the cytoplasm and phagolysosoma-like structures of epithelial cells from the gills and the skin. The bacteria measured 0.9 ± 0.2 μm × 2.1 ± 0.6 mm and had a double cell membrane (the outer one having undulating projections), with variable electron-dense and electron-lucent areas. Ultrastructurally, abundant myelin figures surrounded the microorganisms within host cell cytoplasm. Results indicated that Piscirickettsia-like organisms can cause massive epithelial cell damage associated with concomitant alteration of the electrolyte balance.