Background  Bali Province was affected by avian influenza H5N1 outbreaks in birds in October 2003. Despite ongoing circulation of the virus, no human infection had been identified by December 2005. Objectives  To assess behavioral patterns associated with poultry rearing in Bali, and to identify potential risk factors for H5N1 infection in humans and in household chickens, ducks and pigs. Methods  A behavioral, virological and seroepidemiologic survey in 38 villages and three live bird markets was completed in December 2005. A multi‐stage cluster design was used to select 291 households with 841 participants from all nine districts in Bali. Specimens were collected from participants as well as a maximum of three pigs, chickens and ducks from each household. Eighty‐seven market vendors participated, where specimens were collected from participants as well as chickens and ducks. Results  Twenty out of the 38 villages sampled had H5N1 outbreaks. Despite exposure to H5N1 outbreaks, none of the participants from villages or markets were seropositive for H5N1. None of the pigs tested were positive for H5N1. Virus isolation rate in ducks and chicken in markets was higher than in households. Transport of poultry in or out of villages was a risk factor for outbreaks in household chickens and ducks. Conclusions  The study highlighted that the market chain and associated behaviors may play a role in maintaining the virus in household flocks. The study adds evidence that transmission of H5N1 to humans remains a rare event despite high level handling of both healthy and sick birds.