Australian infectious bronchitis viruses (IBV) have undergone a separate evolution due to geographic isolation. Consequently, changes occurring in Australian IBV illustrate, independently from other countries, types of variability that could occur in emerging IBV strains. Previously, we have identified two distinct genetic groups of IBV, designated subgroups 1 and 2. IBV strains of subgroup 1 have S1 and N proteins that share a high degree of amino acid identity, 81 to 98% in S1 and 91 to 99% in N. Subgroup 2 strains possess S1 and N proteins that share a low level of identity with subgroup 1 strains: 54 to 62% in S1 and 60 to 62% in N. This paper describes the isolation and characterisation of a third, previously undetected genetic group of IBV in Australia. The subgroup 3 strains, represented by isolate chicken/Australia/N2/04, had an S1 protein that shared a low level of identity with both subgroups 1 and 2: 61 to 63% and 56 to 59%, respectively. However, the N protein and the 3' untranslated region were similar to subgroup 1: 90 to 97% identical with the N protein of subgroup 1 strains. This N4/02 subgroup 3 of IBV is reminiscent of two other strains, D1466 and DE072, isolated in the Netherlands and in the USA, respectively. The emergence of the subgroup 3 viruses in Australia, as well as the emergence of subgroup 2 in 1988, could not be explained by any of the mechanisms that are currently considered to be involved in generation of IBV variants.