The emergence of novel influenza strains through reverse-zoonotic transmission poses potential risks to both animal and human health. This study characterized a naturally isolated reassortant canine H3N2 virus carrying the matrix (M) gene of 2009 pandemic H1N1 virus. In vitro experiments revealed that the M variant canine H3N2 virus exhibited enhanced replication in human lung epithelial cells (A549) compared to the parental canine H3N2 virus, whereas both viruses displayed similarly limited replication capacity in porcine respiratory epithelial cells. In addition, the M variant cH3N2 induced lower levels of IFN-α and TNF-α than the parental cH3N2, indicating attenuated innate immune activation in porcine bronchial epithelial cells. In vivo, intranasal inoculation of swine with either virus did not result in productive infection. Only weak antibody responses were detected, and the M variant cH3N2 elicited lower antibody responses than the parental cH3N2. Collectively, these findings demonstrate that acquisition of the pandemic H1N1 M gene was associated with enhanced viral replication in human cells but did not establish productive infection in swine, underscoring its host-specific effects. In addition, the altered cytokine responses suggest that the pandemic H1N1 M gene may contribute to modulation of host innate immune signaling, with potential implications for viral adaptation and host immune responses.