More than 170 people in the country’s central province of Quang Ngai have reported symptoms.
The disease begins with a rash on the hands and feet: it can progress to liver problems and multiple organ failure.
Vietnamese health ministry tests have failed to pinpoint the cause.
The mystery illness was first reported between April and December 2011 and then subsided, but broke out again last month.
Health workers say it responds well to early intervention but is difficult to treat once established.
Frightened residents of Reu village in an impoverished, mountainous part of Quang Ngai, have laid branches across the path to the houses of infected people to try to isolate the outbreak.
“We have to block the entrances here to stop patients from getting out and spreading the disease,” one resident, Pham Van Tray, told Vietnamese TV.
The government has said it will ask the World Health Organization and the US Centers for Disease Control and Prevention to join its investigation.