From November 1990 to June 1991 33 acute cases of melioidosis occurred in the Northern Territory, Australia; 25 cases were reported in the capital city, Darwin. We carried out an epidemiological investigation to exclude a common source outbreak, describe the risk factors for disease, and develop and institute appropriate control measures. We compared population based attack rates among various risk groups using logistic regression, and the demographic, medical and behavioral risk factors for melioidosis by a matched case-control study. Environmental Health Officers collected soil, surface water and cooling tower water specimens for Pseudomonas pseudomallei culture. The crude attack rate of melioidosis during the outbreak was 52 per 100,000. Age, gender, race, diabetes and alcohol abuse were independent risk factors for disease. The relative risk of disease in diabetic patients was 12.9 (95% CI 5.1-32.7; p < 0.001) and 6.7 in alcoholic patients (95% CI 2.9-15.2; p < 0.001). We found no significant difference between cases and controls in matched pair analysis for any of several exposure factors studied. We isolated Pseudomonas pseudomallei from 4% of soil samples and 9% of surface water samples. Our study confirms the importance of host factors in the development of melioidosis, and attempts to quantify the risk of disease during the Darwin epidemic. Pseudomonas pseudomallei is widespread in the soil of urban Darwin.