A prospective study was conducted to determine the significance of melioidosis in the Balimo district of Western Province, Papua New Guinea. During 1998, after the establishment of laboratory procedures and increasing local clinical awareness, the disease was found in 1.8% (95% CI 0.37-5.1%) of individuals presenting with fever refractory to standard treatment. The clinical incidence was 20.0 per 100,000 population (95% CI 12.2-30.9). The median age of culture-confirmed cases was 9.5 years (interquartile range 8.3-14.8 years). The seroprevalence of 747 community children in the region tested was 8.2% (95% CI 6.2-10.4%). Most individuals presented during the rainy season with a febrile disease refractory to standard treatment, sometimes mimicking tuberculosis. Some family clustering was apparent. All patients with bacteraemic melioidosis died, but treatment with the available conventional therapies of chloramphenicol, co-trimoxazole or doxycycline resulted in survival and cure in six patients with subacute/localised melioidosis. Further studies are needed to ascertain the local epidemiology and why children appear particularly at risk, as well as to establish the true extent of melioidosis in Papua New Guinea.