While the company claimed that it is not aware of any active exploits for the vulnerability, security advisory 926043 details the flaw in the WebViewFolderIcon ActiveX control in Windows Shell.
According to Microsoft, the vulnerability could be exploited by viewing a maliciously-crafted HTML file.
Once the exploit has been launched, an attacker could execute code remotely on the compromised PC, including malware and spyware programs.
A spokesman said that a patch is set to be released as part of Microsoft's next scheduled update on 10 October.
Microsoft suggests several workarounds in the meantime, including setting Internet Explorer to ask permission before running ActiveX. This will cause frequent requests as a large number of sites use ActiveX controls.
The US Computer Emergency Response Team recommends users to avoid clicking on unsolicited or otherwise suspicious links.
The SANS Internet Storm Centre suggests that users should think about switching from Internet Explorer to other web browsers.
Microsoft said that versions of Windows Server 2003 and Windows Server 2003 Service Pack 1 with the Enhanced Security Configuration enabled were not affected by the vulnerability.
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