Mutations in a wild duck isolate of avian influenza virus were detected in isolates shed by chickens within 1 day after inoculation. The newly adapted virus was transmitted to naïve chickens in direct contact and sharing food and water. Two consistent amino acid substitutions in the hemagglutinin have been identified, A198V and S274F, and may be important in transmissibility. Mutants with a 30–amino acid deletion in the neuraminidase stalk region 43–72 (N9 numbering) were recovered from inoculated chickens, but not from naïve chickens in contact. The NA stalk mutant virus did not replicate well in Pekin ducks. In vivo viral replication was at low titers and a change in tropism from the respiratory to the digestive tract was observed. Our results indicated that there is a rapid genetic adaptation of wild bird isolates in poultry species, but that resultant viruses may have phenotypes that are intermediate and not fully adapted to the new host.