The objective of this study was to determine the epidemiological significance of subterranean mosquito breeding sites to the 1993 outbreak of dengue fever (type 2) in the northern Queensland town of Charters Towers, Australia. In recent studies on subterranean mosquito breeding, containers such as wells and service manholes have been shown to be important breeding sites to Australia’s only dengue vector, Aedes aegypti (L.). This study demonstrates a direct epidemiological association between subterranean breeding sites and dengue virus infection. The mean distance between residents seropositive for dengue 2 and the nearest subterranean container (113 m) was significantly less than for a randomly selected control (191 m), (F = 81.9; df = 1, 478; P < 0.001). Residents positive for dengue 2 antibodies was 2.47 (95% confidence interval 1.88–3.24) times higher for those living within 160 m of a well or service manhole, compared with those residing further away. These findings emphasize the importance of including subterranean water containers in Ae. aegypti surveillance and control programs.