The global outbreak of avian influenza virus infections in poultry and wild birds as well as the high mortality rate in patients infected with the viruses pose a worldwide alert to the risk of an emerging epidemic. Scientific data to date showed some strains of avian influenza viruses including H5N1 are capable of going through mutations to develop into a novel, pandemic strain of influenza virus. Recent research has advanced our knowledge of the biological behavior of the virus, its interactions with mammalian cells, downstream signal transduction pathways, and the antiviral immune responses. A better understanding of the virus-activated signaling pathways will provide new clues to delineate the mechanisms underlying the pathogenesis of avian influenza virus infection. Here, we reviewed the contributions of human and avian influenza virus virulence factors including hemagglutinin HA, RNA polymerase, and nonstructural protein NS1. We next discussed the interaction of the viruses with cellular factors including Toll-like receptor TLR, RIG-I/MDA5, signaling kinases including PKR, MAPK and PI3K, and transcription factors NF-κB and IRF. Finally, we commented on the role of apoptosis and caspase activation as important host defense mechanisms. Taken together, virus replication and its activated inflammation contribute to the severity of avian influenza infections.