Hepatitis E virus (HEV) infection is an important public health problem, causing outbreaks in India and many other developing countries. In May, 2012, there was a sudden rise in the number of jaundice cases reporting to community health center (CHC) Anni, District Kullu of Himachal Pradesh. We investigated this outbreak to study the epidemiology as well as reasons for this outbreak and then suggest various prevention and control measures to prevent its occurrence in future. Material and Methods: Extensive house-to-house search of case defined clinical jaundice cases and serum samples of 131 cases were collected. Out of the confirmed jaundice cases 25 random samples were tested for IgM antibodies against HEV and hepatitis A virus (HAV). Bacteriological investigation of two water samples, one each from the two nearby streams, whose water was supplied for drinking, was also done. Results: A total 81cases of jaundice were confirmed from April to July 2012. 20 serum samples were positive for HEV IgM antibody. One of the water samples contained more than 100 coliforms in 100 ml of water. Conclusion: It was a confirmed outbreak of hepatitis E in rural area of Kullu. Fecal contamination of water due to open defecation was the reason for occurrence and spread of this outbreak