Epidemiological and evolutionary dynamics of influenza B Victoria and Yamagata lineages remained poorly understood in the tropical Southeast Asia region, despite causing seasonal outbreaks worldwide. From 2012–2014, nasopharyngeal swab samples collected from outpatients experiencing acute upper respiratory tract infection symptoms in Kuala Lumpur, Malaysia, were screened for influenza viruses using a multiplex RT-PCR assay. Among 2,010/3,935 (51.1%) patients infected with at least one respiratory virus, 287 (14.3%) and 183 (9.1%) samples were tested positive for influenza A and B viruses, respectively. Influenza-positive cases correlate significantly with meteorological factors—total amount of rainfall, relative humidity, number of rain days, ground temperature and particulate matter (PM10). Phylogenetic reconstruction of haemagglutinin (HA) gene from 168 influenza B viruses grouped them into Yamagata Clade 3 (65, 38.7%), Yamagata Clade 2 (48, 28.6%) and Victoria Clade 1 (55, 32.7%). With neuraminidase (NA) phylogeny, 30 intra-clade (29 within Yamagata Clade 3, 1 within Victoria Clade 1) and 1 inter-clade (Yamagata Clade 2-HA/Yamagata Clade 3-NA) reassortants were identified. Study of virus temporal dynamics revealed a lineage shift from Victoria to Yamagata (2012–2013), and a clade shift from Yamagata Clade 2 to Clade 3 (2013–2014). Yamagata Clade 3 predominating in 2014 consisted of intra-clade reassortants that were closely related to a recent WHO vaccine candidate strain (B/Phuket/3073/2013), with the reassortment event occurred approximately 2 years ago based on Bayesian molecular clock estimation. Malaysian Victoria Clade 1 viruses carried H274Y substitution in the active site of neuraminidase, which confers resistance to oseltamivir. Statistical analyses on clinical and demographic data showed Yamagata-infected patients were older and more likely to experience headache while Victoria-infected patients were more likely to experience nasal congestion and sore throat. This study describes the evolution of influenza B viruses in Malaysia and highlights the importance of continuous surveillance for better vaccination policy in this region.