The wide circulation of novel avian influenza viruses (AIVs) highlights the risk of pandemic influenza emergence in China. To investigate the prevalence and genetic diversity of AIVs in different ecological contexts, we surveyed AIVs in live poultry markets (LPMs), free range poultry and the wetland habitats of wild birds in Zhejiang and Hubei provinces. Notably, LPMs contained the highest frequency of AIV infection and the greatest number of subtypes (9) and subtype co-infections (14), as well as frequent reassortment, suggesting that they play an active role in fueling AIV transmission. AIV positive samples were also identified in wild birds in both two provinces and free range poultry in one sampling site close to a wetland region in Hubei. H9N2, H7N9 and H5N1 were the most commonly sampled subtypes in the LPMs from Zhejiang, while H5N6 and H9N2 were the dominant subtypes in the LPMs from Hubei. Phylogenetic analyses of the whole genome sequences of 43 AIVs revealed that three reassortant H5 subtypes were circulating in LMPs in both geographic regions. Notably, the viruses sampled from the wetland regions and free range poultry contained complex reassortants, for which the origins of some segments were unclear. Overall, our study highlights the extent of AIV genetic diversity in two highly populated parts of eastern China, particularly in live poultry markets, and emphasizes the need for continual surveillance