A novel influenza A (H1N1) virus has spread rapidly across the globe. Judging its pandemic potential is difficult with limited data, but nevertheless essential to inform appropriate health responses. By analyzing the outbreak in Mexico, early data on international spread, and viral genetic diversity, we make an early assessment of transmissibility and severity. Our estimates suggest that 23,000 (range 6000 to 32,000) individuals had been infected in Mexico by late April, giving an estimated case fatality ratio (CFR) of 0.4% (range: 0.3 to 1.8%) based on confirmed and suspected deaths reported to that time. In a community outbreak in the small community of La Gloria, Veracruz, no deaths were attributed to infection, giving an upper 95% bound on CFR of 0.6%. Thus, although substantial uncertainty remains, clinical severity appears less than that seen in the 1918 influenza pandemic but comparable with that seen in the 1957 pandemic. Clinical attack rates in children in La Gloria were twice that in adults (<15 years of age: 61%; ≥15 years: 29%). Three different epidemiological analyses gave basic reproduction number (R0) estimates in the range of 1.4 to 1.6, whereas a genetic analysis gave a central estimate of 1.2. This range of values is consistent with 14 to 73 generations of human-to-human transmission having occurred in Mexico to late April. Transmissibility is therefore substantially higher than that of seasonal flu, and comparable with lower estimates of R0 obtained from previous influenza pandemics.