Professor Ian Wilmut, who headed the Scottish-based team that created Dolly in 1996, said the animal has arthritis in her left hind leg at the hip and the knee -- an unusual ailment for a sheep that young.
He told journalists he and other scientists at the Roslin Institute in Edinburgh were concerned Dolly may be a victim of premature aging and that the condition could have been triggered by a genetic defect while she was being cloned.
"There is no way of knowing if this is down to cloning or whether it is a coincidence," Wilmut said. "We will never know the answer to that question.
"We can't tell how it will develop," he added, but "she is responding well to treatment with anti-inflammatory drugs."
Wilmut said the scientists were "very disappointed, and we will have to keep a careful eye on her. We will be monitoring her condition to see how it develops. ... In every other way, she is perfectly healthy, and she has given birth to six healthy lambs."
The professor indicated in a later interview with the British Broadcasting Corp. scientists feared the problems with Dolly could impact on further research into cloning, and he called for a research program to determine what impact the process has on animal health.
"This is a very young technique," Wilmut said. "It has great potential." But as well as studying the animals "that are already there," he added, "we have to continue with the process to improve and use the technology."
The Dolly development was quickly seized upon by animal welfare groups, some of which called for an immediate cessation of cloning experiments.
Joyce D'Silva, director of Compassion in World Farming, urged an end to animal cloning and told BBC radio that "I think of the hundreds and hundreds of other cloned lambs who have been born and have malformed hearts, lungs or kidneys."
"They have struggled to survive for a few days and then had their lungs filled with fluid and gasped their way to death or had to be put out of their misery by their creators," she said. "That is the real story of cloning."
Reports of Dolly's arthritis came only days after scientists in the United States announced they had produced five pig clones that had been modified to help prevent their organs from being rejected if they were transplanted into humans.
The American scientists said their pig clones lack a gene that is largely responsible for the massive immune reaction triggered by attempts to transplant animal organs into humans.