Human infection associated with a novel reassortant avian influenza H7N9 virus has recently been identified in China. A total of 132 confirmed cases and 39 deaths have been reported. Most patients presented with severe pneumonia and acute respiratory distress syndrome. Although the first epidemic has subsided, the presence of a natural reservoir and the disease severity highlight the need to evaluate its risk on human public health and to understand the possible pathogenesis mechanism. Here we show that the emerging H7N9 avian influenza virus poses a potentially high risk to humans. We discover that the H7N9 virus can bind to both avian-type (α2,3-linked sialic acid) and human-type (α2,6-linked sialic acid) receptors. It can invade epithelial cells in the human lower respiratory tract and type II pneumonocytes in alveoli, and replicated efficiently in ex vivo lung and trachea explant culture and several mammalian cell lines. In acute serum samples of H7N9-infected patients, increased levels of the chemokines and cytokines IP-10, MIG, MIP-1β, MCP-1, IL-6, IL-8 and IFN-α were detected. We note that the human population is naive to the H7N9 virus, and current seasonal vaccination could not provide protection.