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 China has conducted mass culls of birds in a bid to stem the virus
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The latest cases are in Jingshan county in Hubei province, indicating that the virus appears to be spreading.
Prime Minister Wen Jiabao warned this week that the country was facing a "very serious situation".
Four suspected human cases of the virus are being investigated, but so far there have been no confirmed human infections in China.
Bird flu has killed more than 60 people in South East Asia since 2003.
Fears for humans
China says the latest outbreak has killed 2,500 birds, and more than 30,000 birds are being culled.
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These are the first reported cases in central Hubei province, but there were confirmed cases last month in neighbouring Anhui and Hunan provinces.
The authorities have also warned that fake bird vaccines have been sold in the worst affected area, Liaoning province in the north-east.
That could mean that millions of birds have not been properly inoculated and are already sick with bird flu, but showing no symptoms.
Experts fear that with so many birds infected, it is only a matter of time before human cases of bird flu emerge.