H5N1 avian influenza virus (AIV) has emerged as a pathogenic entity for a variety of species, including humans, in recent years. Here we report an outbreak among migratory birds on Lake Qinghaihu, China, in May and June 2005, in which more than a thousand birds were affected. Pancreatic necrosis and abnormal neurological symptoms were the major clinical features. Sequencing of the complete genomes of four H5N1 AIV strains revealed them to be reassortants related to a peregrine falcon isolate from Hong Kong and to have known highly pathogenic characteristics. Experimental animal infections reproduced typical highly pathogenic AIV infection symptoms and pathology.