The poultry meat trade in Egypt depends mainly on live bird markets (LBMs) because of insufficient slaughterhouses, lack of marketing infrastructure, and cultural preference for consumption of freshly slaughtered poultry. There are two types of LBMs in Egypt: retail shops and traditional LBMs where minimal, if any, food safety standards or veterinary inspection are implemented. Before January 2009, LBMs were considered to be a missing link in the epidemiology of avian influenza in Egypt. This incited us to initiate this surveillance to better understand the perpetuation of H5N1 and the risk of infection in poultry markets. Seventy-one out of 573 (12.4%) examined LBMs were positive for the H5N1 subtype by real-time–quantitative polymerase chain reaction (RT-qPCR) from January to April 2009. Where a 70.4% detection rate from LBMs had waterfowl only as a solitary sold species, a 26.8% detection rate from LBMs had waterfowl mixed with chicken and/or turkey, and 2.8% from LBMs had only turkey. Higher incidence, 40.8%, of positive LBMs was recorded during the cold month of February and concentrated mainly in the highly populated Nile Delta. These findings revealed wide circulation of H5N1 avian influenza virus in LBMs in Egypt, which poses a threat to public health and the poultry industry. Long-term control measures are required, and routine surveillance of bird markets should be conducted year-round.