Following a large outbreak of community-acquired psittacosis in 2002 in residents of the Blue Mountains, New South Wales, Australia, we reviewed new cases in this area over a 7-year period from 2003 to 2009. Using the 2010 criteria from the Centers for Disease Control National Notifiable Diseases Surveillance System, 85 patients with possible psittacosis were identified, of which 48 were identified as definite or probable infection. Clinical features of these cases are summarized. In addition to Chlamydia-specific serology, specimens, where available, underwent nucleic acid testing for chlamydial DNA using real-time PCR. Chlamydophila psittaci DNA was detected in samples from 23 patients. Four of 18 specimens were culture positive. This is the first description of endemic psittacosis, and is characterized in this location by community-acquired psittacosis resulting from inadvertent exposure to birds. The disease is likely to be under-diagnosed, and may often be mistaken for gastroenteritis or meningitis given the frequency of non-respiratory symptoms, particularly without a history of contact with birds. Clinical characteristics of endemic and outbreak-associated cases were similar. The nature of exposure, risk factors and reasons for the occurrence of outbreaks of psittacosis require further investigation.