In spring 2021, a long-term care facility (LTCF) of 154 residents in Luxembourg experienced a large severe, acute respiratory-syndrome coronavirus 2 (SARS-CoV-2) outbreak a few days after a vaccination campaign. We conducted an outbreak investigation and a serosurvey two months after the outbreak, compared attack rates (AR) among residents and staff, and calculated hospitalization and case-fatality rates (CFR). Whole genome sequencing (WGS) was performed to detect variants in available samples and results were compared to genomes published on GISAID. Eighty-four (55%) residents and forty-five (26%) staff members tested positive for SARS-CoV-2; eighteen (21%) residents and one (2.2%) staff member were hospitalized, and twenty-three (CFR: 27%) residents died. Twenty-seven (21% of cases) experienced a reinfection. Sequencing identified seventy-seven cases (97% of sequenced cases) with B.1.1.420 and two cases among staff with B.1.351. The outbreak strain B.1.1.420 formed a separate cluster from cases from other European countries. Convalescent and vaccinated residents had higher anti-SARS-CoV-2 IgG antibody concentrations than vaccinated residents without infection (98% vs. 52%, respectively, with >120 RU/mL, p < 0.001). We documented an extensive outbreak of SARS-CoV-2 in an LTCF due to the presence of a specific variant leading to high CFR. Infection in vaccinated residents increased antibody responses. A single vaccine dose was insufficient to mitigate the outbreak.