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The epidemiology ofVibrio parahaemolyticus, the leading cause of seafood-borne gastroenteritis world-wide, dramatically changed in the United States following the translocation and establishment of a Pacific lineage ofV. parahaemolyticus, sequence type (ST) 36, into the Atlantic. In this study we used phylogeography based on traceback locations and comparative genomics to identify features that promoted evolution, dispersal, and competitive dominance of ST36. This revealed a striking shuffling of filamentous prophage in the familyInoviridae(inoviruses), including loss of a prophage that had been maintained for decades, accompanied modern diversification and competitive replacement of the endemic north Pacific population. Subsequently, at least five distinct progenitors arising from this diversification translocated from the Pacific into the Atlantic and established four geographically defined clonal subpopulations with remarkably low migration or mixing. Founders of two prevailing Atlantic subpopulations each acquired new diagnostic inoviruses while other subpopulations that apparently declined did not. Broader surveys indicate inoviruses are common and active among the global population ofV. parahaemolyticusand though parallel inovirus replacements, such as in ST36, appear infrequent, they are notable in pathogenic lineages that dispersed. Importance: An understanding of the processes that contribute to emergence of pathogens from environmental reservoirs is critical as changing climate precipitates pathogen evolution and population expansion. Phylogeographic analysis ofVibrio parahaemolyticushosts combined with analysis of theirInoviridaephage resolved ambiguities of diversification dynamics which preceded successful Atlantic invasion by the epidemiologically predominant ST36 lineage. It has been established experimentally that filamentous phage can limit host recombination, but here we show that phage loss is linked to rapid bacterial host diversification during epidemic spread in natural ecosystems alluding to a potential role for ubiquitous inoviruses in the adaptability of pathogens. This work paves the way for functional analyses to define the contribution of inoviruses in the evolutionary dynamics of environmentally transmitted pathogens.