A highly virulent H1N1 influenza A virus, A/Swine/Kansas/77778/2007 (KS07), which caused approximately 10% mortality in finishing pigs, was isolated from herds in the Midwestern United States. Molecular and phylogenic analysis revealed this swine isolate was a triple reassortant virus, similar to an H1N1 virus that infected humans and pigs at an Ohio county fair in August 2007. A pig challenge model was developed to evaluate the pathogenicity and transmission capacity of the KS07 virus. The results confirmed that the KS07 virus is highly virulent in pigs and easily transmitted to sentinel animals. The KS07 virus failed to cross-react with a panel of H1-specific swine sera. Interestingly, the KS07 virus shed for a prolonged period up to 7 days in infected pigs, indicating that this virus can spread efficiently between animals. The highly virulent H1N1 swine influenza virus is further evidence of reassortment among avian, human and swine influenza viruses and justifies the need for continued surveillance of influenza viruses in swine.