The condition, called hand, foot and mouth - but not related to animal disease foot and mouth, has infected at least 14 pupils in Cardiff, Rhondda Cynon Taf and the Vale of Glamorgan since the end of August.
But it is thought that larger numbers of children could have caught the virus, as it is not a notifiable disease.
The virus' emergence comes as parents in Cardiff were also warned to look out for measles symptoms in their children, especially those who have not been given the MMR jab.
An 18-year-old and 22-year-old living in the city have been confirmed as suffering from the potentially-lethal illness. The two cases are linked to 13 more in pupils and teachers at Newcastle Emlyn Comprehensive School, in Carmarthenshire.
An investigation into the outbreak, the first since last October, has been launched by the National Public Health Service for Wales (NPHS).
The NPHS also told the Echo that it was aware of at least 14 cases of hand, foot and mouth in South Wales.
The virus is not linked to the devastating disease which affects farm livestock and caused the widespread closure of the countryside in 2002.
Hand, foot and mouth disease mainly affects children and symptoms include feeling generally unwell with a sore mouth for a day or two before a rash appears. The rash causes blisters on the hands and feet and sores inside the mouth. Blisters may also appear on the buttocks of very young children.
The disease can also cause a mild fever but the symptoms usually subside after seven to 10 days without medical treatment. The disease is spread through coughing and sneezing or through direct contact with faeces of infected people, Wales Online reports.
The NPHS said that thorough hand washing can help to prevent its spread and it also recommended that infected people use disposable tissues.
Children who are infected can continue to go to school if they feel well enough.
An NPHS spokeswoman said: "We are not aware that any children have been excluded from school or any schools shut."