Avian-origin H3N2 canine influenza virus (CIV) transferred to dogs in Asia around 2005, becoming enzootic throughout China and South Korea before reaching the United States in early 2015. To understand the posttransfer evolution and epidemiology of this virus, particularly the cause of recent and ongoing increases in incidence in the United States, we performed an integrated analysis of whole-genome sequence data from 64 newly sequenced viruses and comprehensive surveillance data. This revealed that the circulation of H3N2 CIV within the United States is typified by recurrent epidemic burst-fade-out dynamics driven by multiple introductions of virus from Asia. Although all major viral lineages displayed similar rates of genomic sequence evolution, H3N2 CIV consistently exhibited proportionally more nonsynonymous substitutions per site than those in avian reservoir viruses, which is indicative of a large-scale change in selection pressures. Despite these genotypic differences, we found no evidence of adaptive evolution or increased viral transmission, with epidemiological models indicating a basic reproductive number, , of between 1 and 1.5 across nearly all U.S. outbreaks, consistent with maintained but heterogeneous circulation. We propose that CIV's mode of viral circulation may have resulted in evolutionary cul-de-sacs, in which there is little opportunity for the selection of the more transmissible H3N2 CIV phenotypes necessary to enable circulation through a general dog population characterized by widespread contact heterogeneity. CIV must therefore rely on metapopulations of high host density (such as animal shelters and kennels) within the greater dog population and reintroduction from other populations or face complete epidemic extinction. The relatively recent appearance of influenza A virus (IAV) epidemics in dogs expands our understanding of IAV host range and ecology, providing useful and relevant models for understanding critical factors involved in viral emergence. Here we integrate viral whole-genome sequence analysis and comprehensive surveillance data to examine the evolution of the emerging avian-origin H3N2 canine influenza virus (CIV), particularly the factors driving ongoing circulation and recent increases in incidence of the virus within the United States. Our results provide a detailed understanding of how H3N2 CIV achieves sustained circulation within the United States despite widespread host contact heterogeneity and recurrent epidemic fade-out. Moreover, our findings suggest that the types and intensities of selection pressures an emerging virus experiences are highly dependent on host population structure and ecology and may inhibit an emerging virus from acquiring sustained epidemic or pandemic circulation.