Around 18 cases of dengue have been confirmed in Portugal's Madeira archipelago, say officials.
Another 191 people are suspected of having contracted the virus which is spread by mosquito bites.
"The existence of epidemic activity of the DEN-1 serotype of dengue is confirmed," the health directorate general (DGS) said, adding that 26 people had been taken to hospital but only 11 were still there Wednesday morning.
Authorities said the outbreak was "not unexpected as the mosquitoes' existence on the island has been known since 2005", but no one had been infected so far.
Health officials called on residents to use protection against mosquito bites and asked airlines to step up precautions so the mosquitoes do not spread.
Dengue is spread by one of four viruses transmitted by the Aedes aegypti mosquito. It causes high fever, headaches, itching and joint pains. At an advanced stage it can lead to haemorrhaging and death.
According to the UN's World Health Organisation, between 50 and 100 million dengue infections occur each year in more than 100 countries. In 1970, the disease was endemic in just nine countries.