On November 18, 2003, the Oakland County Health Division alerted the Michigan Department of Community Health (MDCH) to a varicella (chicken pox) outbreak in a kindergarten-third grade elementary school. On December 11, MDCH and Oakland County public health epidemiologists, with the technical assistance of CDC, conducted a retrospective cohort study to describe the outbreak, determine varicella vaccine effectiveness (VE), and examine risk factors for breakthrough disease (i.e., varicella occurring >42 days after vaccination). This report summarizes the results of that study, which indicated that 1) transmission of varicella was sustained at the school for nearly 1 month despite high vaccination coverage, 2) vaccinated patients had substantially milder disease (<50 lesions), and 3) a period of > or =4 years since vaccination was a risk factor for breakthrough disease. These findings highlight the importance of case-based reporting of varicella and the exclusion of patients from school until all lesions crust or fade away. Information about recognizing vaccinated patients with mild cases should be disseminated to health-care providers, school administrators, and parents.