Dr. Marc J. Musser, 66, former chief medical director of the Veterans Administration, died Tuesday at the VA Hospital in Washington after a long illness.

He had served as VA medical chief from 1970 until he retired in 1974. Since then he had been a consultant to Smith, Kline & French Laboratories, with offices here.

Born in Terre Haute, Ind., Dr. Musser graduated from the University of Wisconsin, where he also received a medical degree. He took residencies in neuropsychiatry and internal medicine at the Wisconsin General Hospital in Madison and joined the faculty of the Universtiy of Wisconsin School of Medicine in 1938.

During World War 11, Dr. Musser commanded the 135th Army Medical Group in the Southwest Pacific.

He then returned to the University of Wisconsin School of Medicine, where he attained the rank of professor. He also did research on the threshold of pain and endocrinology.

Dr. Musser joined the VA in 1957 as a memebr of the hospital staff in Houston, and served as professor of medicine at the Baylor University College of Medicine.

He tranferred to VA headquarters here in 1959 to direct medical research, was promoted in 1962 to administer both research and medical education programs, and was named deputy chief medical director in 1964.

He left the VA in 1966 to serve for four years as executive director of the North Carolina Regional Medical Program.

During this period, Dr. Musser also was chariman of a steering committee that coordinated all the nation's 55 regional medical programs.

He also was a professor of medicine at the medical schools of Duke and Wake Forest universities and adjuct professor of medicine and public health administration at the University of North Carolina School of Medicine.

Dr. Musser was a fellow of the American College of Physicians and a diplomate of the American Board of Internal Medicine. He had been trustee of the American Hospital Association and was past president of the Association of Military Surgions.

He is survived by his wife, Alice Dryden Musser, of the home in Arlington; three sons, David, of Madison; Steven, of Minneapolis, and William S., of Arlington; a daughter, Barbara Billek, of Madison; a brother, Robert, of Joliet, 111, and six grandchildren.

The family suggests that expressions of sympathy be in the form of contribution to the Arlington Hospital Association or Children's Hospital.