We investigate the hypocenter distribution of aftershocks of the December 26, 2003 Bam earthquake Mw 6.5 by using a temporal seismic network. The hypocenters distribute linearly over about 20 km in parallel with a line 3.5 km west of the geological Bam fault and extend from the south of Bam city to the heavily damaged area in the eastern part of the city including the historical mud brick citadel Arg-e-Bam. Based on the hypocenter distribution, we propose a schematic 3-D structural model of a new fault that we have named the Arg-e-Bam fault. We suggest that the Bam earthquake occurred not in the Bam fault but in the Arg-e-Bam fault. Bam city is located just above northern part of the Arg-e-Bam fault and also on the rupture propagation direction from the asperity. This may be one of the main reasons why eastern part of Bam city suffered the heaviest damage.