Models for the spread of an SIS epidemic among a population consisting of m households, each containing n individuals, are considered and their behaviour is analysed under the practically relevant situation when m is large and n small. A threshold parameter R-* is determined. For the stochastic model it is shown that the epidemic has a non-zero probability of taking off if and only if R-* > 1, and the extension to unequal household sizes is also considered. For the deterministic model, with households of size 2, it is shown that if R-* less than or equal to 1 then the epidemic dies out, whilst if R-* > 1 the epidemic settles down to an endemic equilibrium. The usual basic reproductive ratio Ro does not provide a good indicator for the behaviour of these household epidemic models unless the household size n is large. (C) 1999 Elsevier Science Inc. All rights reserved.