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Familiarity with and a history of prior sex with casual partners is associated with unprotected anal intercourse and may increase the risk of HIV transmission among gay men. Using data from the Sydney Gay Community Periodic Survey 2007, we explored the relationship between familiarity and unprotected anal intercourse with the last casual partner (UAI-LC). 51% of the men knew their last casual partner and 49% had previously had sex with him. Men were more inclined to engage in UAI-LC if they had previously had sex with this partner. HIV-negative men were more likely to have UAI-LC with a more familiar partner independent of his serostatus. Familiarity with and a previous history of sex between casual partners may result in a false sense of trust and may increase the risk of HIV transmission. HIV prevention services should address this issue and develop programs to improve men's skills in negotiating safer sex.