HIV-1 diversity is increasing in North American and European cohorts which may have public health implications. However, little is known about non-B subtype diversity in the southern United States, despite the region being the epicenter of the nation’s epidemic. We characterized HIV-1 diversity and transmission clusters to identify the extent to which non-B strains are transmitted locally. We conducted cross-sectional analyses of HIV-1 partial pol sequences collected from 1997 to 2014 from adults accessing routine clinical care in North Carolina (NC). Subtypes were evaluated using COMET and phylogenetic analysis. Putative transmission clusters were identified using maximum-likelihood trees. Clusters involving non-B strains were confirmed and their dates of origin were estimated using Bayesian phylogenetics. Data were combined with demographic information collected at the time of sample collection and country of origin for a subset of patients. Among 24,972 sequences from 15,246 persons, the non-B subtype prevalence increased from 0% to 3.46% over the study period. Of 325 persons with non-B subtypes, diversity was high with over 15 pure subtypes and recombinants; subtype C (28.9%) and CRF02_AG (24.0%) were most common. While identification of transmission clusters was lower for persons with non-B versus B subtypes, several local transmission clusters (≥3 persons) involving non-B subtypes were identified and all were presumably due to heterosexual transmission. Prevalence of non-B subtype diversity remains low in NC but a statistically significant rise was identified over time which likely reflects multiple importation. However, the combined phylogenetic clustering analysis reveals evidence for local onward transmission. Detection of these non-B clusters suggests heterosexual transmission and may guide diagnostic and prevention interventions.