Approximately 10% of the Brazilian indigenous population lives in the state of Mato Grosso do Sul (MS), where a large number of new cases of tuberculosis (TB) are reported. This study was conducted to assess TB occurrence, transmission and the utility of TB diagnosis based on the Ogawa-Kudoh (O-K) culture method in this remote population. The incidence of TB was estimated by a retrospective review of the surveillance data maintained by the Notifiable Diseases Surveillance System for the study region. The TB transmission pattern among indigenous people was assessed by genotyping Mycobacterium tuberculosis isolates using the IS 6110 restriction fragment length polymorphism (RFLP) technique. Of the 3,093 cases identified from 1999-2001, 610 (~20%) were indigenous patients (average incidence: 377/100,000/year). The use of the O-K culture method increased the number of diagnosed cases by 34.1%. Of the genotyped isolates from 52 indigenous patients, 33 (63.5%) belonged to cluster RFLP patterns, indicating recently transmitted TB. These results demonstrate high, on-going TB transmission rates among the indigenous people of MS and indicate that new efforts are needed to disrupt these current transmissions.