In early 2004, an H5N2 avian influenza virus (AIV) that met the molecular criteria for classification as a highly pathogenic AIV was isolated from chickens in the state of Texas in the United States. However, clinical manifestations in the affected flock were consistent with avian influenza caused by a low-pathogenicity AIV and the representative virus (A/chicken/Texas/298313/04 [TX/04]) was not virulent for experimentally inoculated chickens. The hemagglutinin (HA) gene of the TX/04 isolate was similar in sequence to A/chicken/Texas/167280-4/02 (TX/02), a low-pathogenicity AIV isolate recovered from chickens in Texas in 2002. However, the TX/04 isolate had one additional basic amino acid at the HA cleavage site, which could be attributed to a single point mutation. The TX/04 isolate was similar in sequence to TX/02 isolate in several internal genes (NP, M, and NS), but some genes (PA, PB1, and PB2) had sequence of a clearly different origin. The TX/04 isolate also had a stalk deletion in the NA gene, characteristic of a chicken-adapted AIV. By analyzing viruses constructed by in vitro mutagenesis followed by reverse genetics, we found that the pathogenicity of the TX/04 virus could be increased in vitro and in vivo by the insertion of an additional basic amino acid at the HA cleavage site and not by the loss of a glycosylation site near the cleavage site. Our study provides the genetic and biologic characteristics of the TX/04 isolate, which highlight the complexity of the polygenic nature of the virulence of influenza viruses.