Avian-origin H3N2 canine influenza virus (CIV) transferred to dogs in Asia around 2005, becoming enzootic throughout China and Korea before reaching the USA in early 2015. To understand the post-transfer evolution and epidemiology of this virus, particularly the cause of recent and ongoing increases in incidence in the USA, we performed an integrated analysis of whole-genome sequence data from 64 newly sequenced viruses and comprehensive surveillance data. This reveals that the circulation of H3N2 CIV within the USA is typified by recurrent epidemic burst-fadeout dynamics driven by multiple introductions of virus from Asia. Although all major viral lineages displayed similar rates of genomic sequence evolution, H3N2 CIV consistently exhibited proportionally more non-synonymous substitutions per site compared to avian reservoir viruses, indicative of a large-scale change in selection pressures. Despite these genotypic differences, we found no evidence of adaptive evolution or increased viral transmission, with epidemiological models indicating a basic reproductive number, R0, of between 1 and 1.5 across nearly all USA outbreaks, consistent with maintained, but heterogeneous circulation. We propose that CIV´s mode of viral circulation may have resulted in evolutionary cul-de-sacs, in which there is little opportunity for the selection of the more transmissible H3N2 CIV phenotypes necessary to enable circulation through a general dog population characterized by widespread contact heterogeneity. CIV must therefore rely on metapopulations of high host density (notably animal shelters) within the greater dog population and reintroduction from other populations or face complete epidemic extinction.IMPORTANCE The relatively recent appearance of influenza A virus (IAV) epidemics in dogs expands our understanding of IAV host-range and ecology, providing useful and relevant models for understanding critical factors involved in viral emergence. Here, we integrate viral whole-genome sequence analysis and comprehensive surveillance data to examine the evolution of the emerging avian-origin H3N2 canine influenza virus (CIV), particularly the factors driving ongoing circulation and recent increase in incidence of the virus within the USA. Our results provide a detailed understanding of how H3N2 CIV achieves sustained circulation within the USA, despite widespread host contact heterogeneity and recurrent epidemic fade-out. Moreover, our findings suggest that the types and intensity of selection pressures an emerging virus experiences are highly dependent on host population structure and ecology, and may inhibit an emerging virus from acquiring sustained epidemic or pandemic circulation.