Since 2013 the occurrence of human infections by a novel avian H7N9 influenza virus in China has demonstrated the continuing threat posed by zoonotic pathogens. Although the first outbreak wave that was centred on eastern China was seemingly averted, human infections recurred in October 2013. It is unclear how the H7N9 virus re-emerged and how it will develop further; potentially it may become a long-term threat to public health. Here we show that H7N9 viruses have spread from eastern to southern China and become persistent in chickens, which has led to the establishment of multiple regionally distinct lineages with different reassortant genotypes. Repeated introductions of viruses from Zhejiang to other provinces and the presence of H7N9 viruses at live poultry markets have fuelled the recurrence of human infections. This rapid expansion of the geographical distribution and genetic diversity of the H7N9 viruses poses a direct challenge to current disease control systems. Our results also suggest that H7N9 viruses have become enzootic in China and may spread beyond the region, following the pattern previously observed with H5N1 and H9N2 influenza viruses.