We investigated two sequential outbreaks of severe diarrhoea in two neighbouring villages of Orissa, in 2005. We conducted descriptive and matched case-control studies. The attack rates were 5·6% (n=62) and 5·2% (n=51), respectively, in the first and second villages. One death was reported in the second village (case fatality 2%). We identified that consumption of milk products prepared in the household of the index case [matched odds ratio (mOR) 5·7, 95% confidence interval (CI) 1·7–30] in the first village, and drinking well water in the second village were associated with the illness (mOR 4·7, 95% CI 1·6–19). We isolated Vibrio cholerae El Tor O1 Ogawa from stool samples from both the villages. Mishandling of milk products led to a cholera outbreak in the first village, which led to sewerage contamination of a well and another outbreak in the second village. Environmental contamination should be expected and prevented during cholera outbreaks.