A single dairy cow in Washington state has tested positive, and the farm has been placed under quarantine.
Many countres have moved to ban US beef imports, but he American Agriculture Secretary urged people not to panic, saying she still intended to serve beef for her Christmas dinner.
Breakfast talked to the head of Washington State's beef commission, Patricia Brumbach.
She told us that the case of suspected BSE had been picked up by routine monitoring.
The authorities have put the farm into quarantine and they say they're sure that no material from the animal's central nervous system - highly infectious in BSE cases - had entered the food chain.
She was relaxed about the ban which some countries have already imposed on imported US beef:
"We consume 90 per cent of our beef here in the States and export only ten per cent.
"Our system so far is working, because we did identify the animal and the infection did not make it into food supplies."
We also spoke to Sean Rickard, who's an advisor on agriculture to the British government.
He told us that very little of the beef on sale in Britain comes from the US, because of EU trade restrictions.
The BSE case - if confirmed - may well be a random event.
"The most important thing is to restore confidence. Our biggest mistake in Britain was not to slaughter every herd where BSE appeared."
Further details from BBC News online
Agriculture Secretary Ann Veneman said a Holstein cow had tested positive - but she insisted US beef was safe.
In response, a number of countries in Asia including America's biggest importer, Japan, have moved swiftly to ban US beef.
BSE has been linked to new variant Creutzfeldt-Jakob Disease (vCJD), a human brain-wasting disease.
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BOVINE SPONGIFORM ENCEPHALOPATHY
First surfaced mid-1980s
Can pass to humans through infected beef products
Human form of disease called vCJD
vCJD has killed 137 people, mainly in the UK
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The diseased cow was tested for mad cow disease on 9 December and a tissue sample was being flown by military jet to the UK for further tests. The results will take a few days to come through.
The farm near Yakima, Washington, where the cow was found has been quarantined.
"We remain confident in the safety of our food supply," Ms Veneman told reporters - adding that she planned to serve beef on Christmas Day.
The dairy cow had been sick or injured and was never destined for the public food supply, Ms Veneman said.
In Tokyo, Japanese agriculture ministry spokesman Hiroaki Ogura said a ban on US beef products took effect immediately, until further information could be gathered.
South Korea - another key US market - followed suit, halting customs inspection of US beef and effectively blocking its entry into the country's markets.
The BBC's Michael Buchanan in Washington says while that will concern exporters, the real harm could come if more cases are discovered and American consumers stop eating beef.
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TOP IMPORTERS OF US BEEF
1. Japan
2. Mexico
3. Canada
4. South Korea
5. Hong Kong
Source: US Meat Export Federation
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Canada, the third biggest foreign market for US beef, said it would wait for confirmation on the test results before taking any action.
In August, the US eased a ban on Canadian beef imports after a single case of the disease was found at a farm in Alberta in May. The two cases do not appear to be connected.
A private study released in November estimated that Canada's beef industry lost $2.5bn (C$3.3bn) in the six months after its mad cow case was discovered.
First diagnosed in Britain in 1986, BSE (Bovine Spongiform Encephalopathy) affected 178,000 British cattle and resulted in the eventual destruction of 3.7 million animals.
It cost British farming billions of dollars as countries around the world banned British beef.
'Abundance of caution'
But Ms Veneman insisted that since 1990, steps had been taken in the US to ensure there could be no similar spread of the disease through American herds.
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COUNTRIES THAT HAVE BANNED US BEEF
Japan
South Korea
Singapore
Taiwan
Malaysia
Thailand
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"Even though the risk to human health is minimal, we will take all appropriate actions out of an abundance of caution," she said.
Correspondents say the US beef business is booming - partly due to the popularity of the protein-rich Atkins diet.
The agriculture minister said she was working with the Department of Homeland Security to assure the public that the suspected case was not terrorist related, or connected with the current terrorism alert in the US.
Most of the beef raised in the United States is consumed by the domestic market, with 10% exported to foreign markets, according to the US Department of Agriculture.
The most important foreign markets are Japan, Mexico, Canada, South Korea and Hong Kong, according to the US Meat Export Federation.