Hendra virus (HeV) was first isolated in 1994, from a disease outbreak involving at least 21 horses and two humans in the Brisbane suburb of Hendra, Australia. The affected horses and humans all developed a severe but unidentified respiratory disease that resulted in the deaths of one of the human cases and the deaths or putting down of 14 of the horses. The virus, isolated by culture from a horse and the kidney of the fatal human case, was initially characterised as a new member of the genus Morbillivirus in the family Paramyxoviridae. Comparative sequence analysis of part of the matrix protein gene of the virus and the discovery that the virus had an exceptionally large genome subsequently led to HeV being assigned to a new genus, Henipavirus, along with Nipah virus (a newly emergent virus in pigs). The regular outbreaks of HeV-related disease that have occurred in Australia since 1994 have all been characterised by acute respiratory and neurological manifestations, with high levels of morbidity and mortality in the affected horses and humans. The modes of transmission of HeV remain largely unknown. Although fruit bats have been identified as natural hosts of the virus, direct bat-horse, bat-human or human-human transmission has not been reported. Human infection can occur via exposure to infectious urine, saliva or nasopharyngeal fluid from horses. The treatment options and efficacy are very limited and no vaccine exists. Reports on the outbreaks of HeV in Australia are collated in this review and the available data on the biology, transmission and detection of the pathogen are summarized and discussed.