On August 28, 2004, about 1237 mountain standard time, an experimental Gibbs Kitfox IV, N728KF, collided with terrain following a loss of control while maneuvering 11.5 miles west of the Payson Airport, Payson, Arizona. The owner/builder was operating the airplane under the provisions of 14 CFR Part 91. The pilot and pilot-rated passenger were seriously injured; the airplane was substantially damaged. Visual meteorological conditions prevailed, and a flight plan had not been filed. The personal local flight originated from the Payson airport about 1210. In written report, the pilot stated that he was maneuvering the airplane about 10-12 miles west of the airport when he began to notice fluctuations in indicated airspeed, resulting from gusty wind conditions. Shortly thereafter, the airplane's indicated airspeed suddenly dropped by more than 30 knots and the airplane stalled. The airplane's nose pitched down and the airplane rolled to the left. The pilot initiated normal stall recovery procedures by reducing the airplane's angle of attack and applying power. The airplane regained airspeed, but the pilot was unable to maneuver the airplane to avoid rising terrain. The pilot added that the airplane impacted the ground in a wings and nose level attitude, indicating to him that the transition from stall recovery to level flight was nearly complete. In a follow-up telephone interview with a National Transporation Safety Board investigator, the pilot more specifically remembered flying the airplane at 50-60 knots, and approximately 700-1,000 feet above ground level, when the loss of control occurred. The pilot stated that the stall speed of the airplane is 38 knots, and he felt that he was operating the airplane within a comfortable airspeed margin. In the written report, the pilot opined that the airplane encountered wind shear, resulting in the airplane's loss of airspeed and a stall/mush condition. He further stated that owners of two other Kitfoxes reported encountering similar wind conditions when flying near the accident site a few hours later. The pilot reported no preimpact mechanical malfunctions or failures with the airplane. In a written report, the pilot-rated passenger recalled the pilot maneuvering the airplane into a narrow canyon northwest of the airport. As the pilot added power and configured the airplane in a climb, the airplane encountered turbulence, rolled to the left and pitched down. The pilot attempted to regain control, but was unable to avoid the terrain. The passenger further stated that the airplane did not appear to have sufficient forward speed during the recovery, and contacted the ground in a level attitude descent. The passenger was not aware of any mechanical malfunctions with the airplane. In a telephone interview with a Safety Board investigator, the pilot of a Cessna 172 recalled maneuvering the airplane over the accident site for about 1 hour 30 minutes while directing an air ambulance helicopter to the location of the accident. The pilot reported that during this time, moderate turbulence and gusty wind conditions prevailed. The pilot encountered difficulty maintaining the airplane at the desired altitude of 7,500 feet mean sea level and at the appropriate airspeed. He added that the indicated airspeed fluctuated with wind gusts, and the airplane's altitude varied by more than 500 feet. The pilot further stated that given the presence of rising terrain and the strong wind conditions and turbulence, he would have been uncomfortable operating the airplane at a lower altitude. The pilot estimated the airplane's altitude above terrain to be about 2,000 feet. In a telephone interview with a Safety Board investigator, the Payson Airport Manager stated that the wind conditions were calm at the airport. The Automated Weather Observation System (AWOS) at Payson airport recorded wind direction and wind speed during the time of the accident. The station recorded, between 1225 and 1240 local time, the wind shifting from 140 degrees to 070 degrees, and then to 250 degrees. Wind speeds were between 0 and 8 knots.