The transmission of avian H5N1 influenza viruses to 18 humans in Hong Kong in 1997 with six deaths established that avian influenza viruses can transmit to and cause lethal infection in humans. This report characterizes the antigenic and biological properties of the H5N1 influenza viruses isolated from chickens, ducks, and geese from farms and poultry markets in Hong Kong during 1997 and compares them with those of virus isolated from the index human case. Each of the H5N1 viruses from Hong Kong poultry markets that were tested were lethal in chickens, possessed polybasic amino acids at the carboxy-terminus of HA1, and by definition were highly pathogenic in poultry. The available nonpathogenic H5 influenza viruses and the pathogenic H5N1 virus from Hong Kong were analyzed with monoclonal antibodies prepared to A/chicken/Pennsylvania/1370/83 (H5N2). The analysis revealed limited antigenic drift in 15 years and established that monoclonal antibodies are useful reagents for identification and antigenic analysis of avian strains that may transmit to humans in the future. One of the monoclonal antibodies permitted separation of the H5N1 influenza viruses from poultry into two groups that correlated with the presence or absence of a carbohydrate at residue 158 adjacent to the receptor binding site on HA. The H5N1 viruses examined replicated in geese, pigs, rats, and mice, but to only a very limited extent in ducks. It is noteworthy that all infected geese shed virus and that the H5N1 viruses caused disease signs and death in a portion (3 of 16) of the geese, with evidence of systemic spread to the brain. The tropism for geese is unusual and may provide insight into the origin of these viruses. In mice, the H5N1 virus caused lethal pneumonia and spread systemically to the brain. Mice would thus provide an ideal model system for studying immune responses and pathogenesis. Transmission experiments in chickens revealed that the H5N1 viruses are spread by fecal–oral transmission rather than by aerosol, and that the viruses are inactivated by drying of feces at ambient temperature. However, infectivity is maintained for at least 4 days in wet feces at 25°C. There were differences in the morphology of the H5N1 viruses isolated from birds and humans. The perpetuation of H5N1 influenza viruses in the poultry markets in Hong Kong and the transmission of these viruses to humans emphasize the importance of these markets in the epidemiology of influenza. The poultry markets are of critical importance in the perpetuation and transmission of influenza viruses to other avian species and to mammals, including humans.