BACKGROUND: In December, 2007, a family cluster of two individuals infected with highly pathogenic avian influenza A (H5N1) virus was identified in Jiangsu Province, China. Field and laboratory investigations were implemented immediately by public-health authorities. METHODS: Epidemiological, clinical, and virological data were collected and analysed. Respiratory specimens from the patients were tested by reverse transcriptase (RT) PCR and by viral culture for the presence of H5N1 virus. Contacts of cases were monitored for symptoms of illness for 10 days. Any contacts who became ill had respiratory specimens collected for H5N1 testing by RT PCR. Sera were obtained from contacts for H5N1 serological testing by microneutralisation and horse red-blood-cell haemagglutinin inhibition assays. FINDINGS: The 24-year-old index case died, and the second case, his 52-year-old father, survived after receiving early antiviral treatment and post-vaccination plasma from a participant in an H5N1 vaccine trial. The index case´s only plausible exposure to H5N1 virus was a poultry market visit 6 days before the onset of illness. The second case had substantial unprotected close exposure to his ill son. 91 contacts with close exposure to one or both cases without adequate protective equipment provided consent for serological investigation. Of these individuals, 78 (86%) received oseltamivir chemoprophylaxis and two had mild illness. Both ill contacts tested negative for H5N1 by RT PCR. All 91 close contacts tested negative for H5N1 antibodies. H5N1 viruses isolated from the two cases were genetically identical except for one non-synonymous nucleotide substitution. INTERPRETATION: Limited, non-sustained person-to-person transmission of H5N1 virus probably occurred in this family cluster. FUNDING: Chinese Ministry of Science and Technology; US National Institute of Allergy and Infectious Diseases, National Institutes of Health; China-US Collaborative Program on Emerging and Re-emerging Infectious Diseases.