On June 24, 2012, CDC notified Public Health Services, County of San Diego Health and Human Services Agency, of a suspected case of vaccinia virus infection transmitted by sexual contact. The case had been reported to CDC by an infectious disease specialist who had requested vaccinia immune globulin intravenous (VIGIV) (Cangene Corporation, Berwyn, Pennsylvania) for a patient with lesions suspicious for vaccinia. The patient reported two recent sexual contacts: one with a partner who recently had been vaccinated against smallpox and a later encounter with an unvaccinated partner. Infections resulting from secondary transmission of vaccinia virus from the smallpox vaccinee to the patient and subsequent tertiary transmission of the virus from the patient to the unvaccinated partner were confirmed by the County of San Diego Public Health Laboratory. The smallpox vaccine had been administered under the U.S. Department of Defense smallpox vaccination program. The vaccinee did not experience vaccine-associated complications; however, the secondary and tertiary patients were hospitalized and treated with VIGIV. No further transmission was known to have occurred. This report describes the epidemiology and clinical course of the secondary and tertiary cases and efforts to prevent further transmission to contacts.