SETTING: England. OBJECTIVE: To investigate the proportion of tuberculosis (TB) cases attributable to recent transmission and factors associated with clustering. DESIGN: Demographic, clinical and microbiological surveillance data were collated from all new culture-confirmed cases in 1998. Using insertion sequence (IS) 6110 restriction fragment length polymorphism (RFLP) typing, strains were classified as clustered (identical patterns) or unique and risk factors were determined using multivariable logistic regression. RESULTS: RFLP patterns were available for 2265 of 3713 (61%) cases: 1808 had >or=5 IS6110 copies, while 372 cases were in 152 clusters, giving an estimated proportion due to recent transmission of 12.2%.Pulmonary disease (aOR 1.6; 95%CI 1.1-2.2), previous treatment (aOR 3.7; 2.2-6.5) and homelessness (aOR 5.5; 1.2-24.1) were independent risk factors for clustering. Fourteen per cent of patients of Indian subcontinent origin were clustered compared with 27% of white patients. Many clusters spanned ethnic groups (45%) and geographical regions (47%). CONCLUSION: The calculated proportion of TB cases due to recent transmission is low.Adjusting for missed cases and study duration, it increases to 27.6%. Many cases may arise from reactivation or acquisition outside England. Transmission within England accounted for approximately one in four cases and occurred over wide geographic areas, between ethnic groups and among the homeless. Molecular epidemiology can inform local and national public health action.