West Nile virus (WNV) strains circulating during the first five years of WNV transmission in New York were collected, partial nucleotide sequences were determined, and in vitro and in vivo phenotypic analyses of selected strains were undertaken to determine whether observed increases in the intensity of enzootic and epidemic transmission in New York State during 2002 and 2003 were associated with viral genetic changes. Functionally diverse regions of the WNV genome were also compared to determine whether some regions may be more or less variable than others. The complete envelope coding regions of 67 strains and fragments of the nonstructural protein 5 (NS5) and 3' noncoding regions of 39 strains collected during 2002 and 2003 were examined. West Nile virus in New York remains relatively genetically homogeneous. Viral genetic diversity was greater in 2002 and 2003 at both the nucleotide and amino acid levels than in previous years due to the emergence of a new WNV genotype in 2002. This genotype persisted and became dominant in 2003. Envelope and NS5 coding regions were approximately two-fold more likely than the 3' untranslated region to contain nucleotide substitutions, and the envelope region was approximately three-fold more likely to contain amino acid substitutions than the NS5 region. Variation was noted in in vivo mosquito transmission assays, but not in in vitro growth studies. Strains belonging to the epizootiologically dominant clade were transmitted after approximately two fewer days of extrinsic incubation, providing a possible mechanism for the dominance of this clade. The observed increase in the intensity of WNV transmission beginning in 2002 was associated with an increase in viral genetic diversity that was the result of the emergence of an additional phylogenetic clade. This genotype seems to possess an advantage over previously recognized WNV strains in mosquito transmission phenotype.