The cause is believed to be Equine Herpes Virus 4 (EHV-4), although one of the horses returned what they called a "mild serological reaction" to equine influenza (EI).
"This is not unusual because all the horses have been vaccinated against EI," said Australian chief veterinary officer, Dr Andy Carroll.
"All horses will all be tested repeatedly to make absolutely sure there is no EI circulating before they are released from quarantine.
"There is currently absolutely no evidence of EI virus at Eastern Creek."
He said all outbreaks of any infectious disease in quarantined horses must be investigated. Because the horses at Eastern creek, near Sydney, have respiratory signs, all the horses have been repeatedly and thoroughly tested.
Equine Herpes Virus 4 (EHV-4) is the respiratory form of the herpes virus in horses.
It is endemic in Australia and is not a notifiable disease, nor a quarantine concern - but is has been circulating within Eastern Creek.
Horses can be "silently" infected with herpes virus, not shed the virus and show no clinical signs in Pre Export Quarantine.
If horses are stressed, for example by international travel, the infection by EHV-4 can come back again and the horse may start shedding the virus.
The affected horses are more than two weeks into their three-week post-arrival quarantine period.
Dr Carroll said the period will be prolonged to ensure all additional testing and other measures show the horses do not have EI, and all the experts are satisfied there is no risk.
"These horses currently present no danger to Australia's domesticated horses."
Dr Carroll said the incident reinforced the need for three weeks of post-arrival quarantine when consignments from different origins are commingled for the first time.