In just a few years, Pepino mosaic virus (PepMV) has become a major threat to greenhouse tomato production around the world. Although tomato seed is suspected to spread the disease, its importance as an initial virus inoculum for PepMV has not been established. To determine the potential for seed transmission, a tomato seed lot highly contaminated with PepMV was used for large-scale seedling grow-out tests. None of 10,000 grow-out seedlings was infected as determined by symptom expression, enzyme-linked immunosorbent assay (ELISA), or infectivity assay on Nicotiana benthamiana. Even though PepMV was not seed transmitted on tomato, the virus was effectively transmitted to tomato and N. benthamiana seedlings through mechanical transmission with seed extract. To examine the exact location where PepMV particles accumulated on the tomato seed, seed coats and embryos were carefully isolated and tested separately by ELISA, real-time RT-PCR, and bioassay on N. benthamiana. PepMV was detected in the seed coat fraction in both immature and mature tomato seeds, but not in the embryo. However, in N. benthamiana, the virus was neither seedborne nor seed-transmitted. Because PepMV is seedborne in tomato, efficient mechanical transmission of PepMV from the virus-contaminated tomato seed to seedlings could initiate a disease epidemic in a new tomato growing area. Thus, it is important to plant certified tomato seed that has been tested free of PepMV.