We sequenced the envelope (E) genes of 59 DEN-2 isolates collected from ten Caribbean islands, six South American countries, and two Central American countries between 1981 and 2000, a period characterized by hyperendemicity and increased incidence of severe dengue. Fifty-two isolates belonged to "American/Asian" subtype IIIb, possessing a characteristic polar residue at envelope aa position 390 (N [n = 48] or S [n = 4]) common to that group. Six isolates from Trinidad (1981), Honduras (1991 [4]), and El Salvador (1987) fell into the "Native American" subtype V (D at aa 390), and one from Honduras (1986) belonged to "Asian" subtype I. The data suggest that after its first isolation in the Caribbean in 1981, genotype IIIb spread throughout the Americas and effectively replaced subtype V throughout the Caribbean basin. The strain also evolved into several distinct lineages, based on substitutions in the E glycoprotein (amino acids 91 and 131), two of which were still in circulation in 2000. Interestingly, a molecular clock did not fit the data well, suggesting that other sources of rate variation, such as differential selection or differences in effective population sizes, may exist among lineages. Our results indicate the importance of large temporal- and geographical-scale phylogenetic studies in understanding disease dynamics, particularly where replacements between regions can occur.