It's the second case of the deadly disease detected in U.S. herds in less than two years.
The Agriculture Department had cleared the animal last November, although it had twice tested positive on rapid tests. Agriculture Secretary Mike Johanns said further tests in England indicate the cow tested positive for bovine spongiform encephalopathy. He said the cow never entered the food supply.
Johanns directed Department of Agriculture scientists to develop a new protocol including dual testing for BSE.
"I want to make sure we continue to give consumers every reason to be confident in the health of our cattle herd," Johanns said.
The animal was born before the United States instituted a feed ban in August 1997, forbidding the use of most mammalian protein in cattle feed.
The watchdog group Consumers Union suggested loopholes in the ban could allow mad cow disease to spread.
"Even the remains of an animal known to carry a mad cow-type disease could legally go into feed for pigs, chickens and pets under current Food and Drug Administration rules," Consumers Union said in a statement.