Mycobacterium ulcerans, the organism which causes Buruli or Bairnsdale ulcer, has never been isolated in culture from an environmental sample. Most foci of infection are in tropical regions. The authors describe the first 29 cases of M. ulcerans infection from a new focus on an island in temperate southern Australia, 1992–5. Cases were mostly elderly, had predominantly distal limb lesions and were clustered in a small region in the eastern half of the main town on the island. The authors suspected that an irrigation system which lay in the midst of the cluster was a source of infection. Limitation of irrigation was associated with a dramatic reduction in the number of new cases. These findings support the hypothesis that M. ulcerans has an aquatic reservoir and that persons may be infected directly or indirectly by mycobacteria disseminated locally by spray irrigation.