We investigated the current molecular epidemiological status of HIV-1 in Mongolia, a country with very low incidence of HIV-1 though with rapid expansion in recent years. HIV-1 pol (1065 nt) and env (447 nt) genes were sequenced to construct phylogenetic trees. The evolutionary rates, molecular clock phylogenies, and other evolutionary parameters were estimated from heterochronous genomic sequences of HIV-1 subtype B by the Bayesian Markov chain Monte Carlo method. We obtained 41 sera from 56 reported HIV-1-positive cases as of May 2009. The main route of infection was men who have sex with men (MSM). Dominant subtypes were subtype B in 32 cases (78%) followed by subtype CRF02_AG (9.8%). The phylogenetic analysis of the pol gene identified two clusters in subtype B sequences. Cluster 1 consisted of 21 cases including MSM and other routes of infection, and cluster 2 consisted of eight MSM cases. The tree analyses demonstrated very short branch lengths in cluster 1, suggesting a surprisingly active expansion of HIV-1 transmission during a short period with the same ancestor virus. Evolutionary analysis indicated that the outbreak started around the early 2000s. This study identified a current hot spot of HIV-1 transmission and potential seed of the epidemic in Mongolia. Comprehensive preventive measures targeting this group are urgently needed.