Paramedics were called to holiday cabins and chalets in the Soonhope area around a mile outside of Peebles shortly before midnight on Saturday.
A 60-year-old man had died and a 60-year-old woman and 31-year-old man were seriously ill.
Police remained at the scene as an investigation was launched into the circumstances yesterday.
It is understood that the trio may have suffered carbon monoxide poisoning dubbed “the silent killer”.
A Police Scotland spokeswoman said: “Police in the Scottish Borders were called to an address in the Soonhope area of Peebles at around 11:45pm on Saturday where three people had taken unwell.
“A 59-year-old man was sadly pronounced dead at the scene.
“A 60-year-old woman and a 31-year-old man were taken to the Edinburgh Royal Infirmary.
“Inquiries into the full circumstances surrounding this are currently ongoing.”
It is understood that the chalets, known locally as the Soonhope Huts, are popular with holidaymakers and weekend visitors from Edinburgh.
Last month research conducted with 2000 UK homeowners revealed how one in ten Scottish adults has suffered carbon monoxide poisoning in their home.
It is most often attributed to a fault with a gas boiler, fire or gas appliance.
Earlier this month the parents of two children who died from carbon monoxide poisoning on holiday in Corfu welcomed a report criticising holiday operator Thomas Cook’s treatment of the family following the deaths.
Bobby and Christi Shepherd, aged six and seven, died at the Louis Corcyra Beach Hotel when they were overcome by fumes from a faulty boiler during a family holiday in October 2006.