Despite great efforts to control the infection of poultry with H5N1 viruses, these pathogens continue to evolve and spread in nature, threatening public health. Elucidating the characteristics of H5N1 avian influenza virus will benefit disease control and pandemic preparation. Here, we sequenced the genomes of 15 H5N1 avian influenza viruses isolated in Vietnam in 2006 and 2007 and performed phylogenetic analyses to compare these sequences with those of other viruses available in the public databases. Molecular characterization of the H5N1 viruses revealed that seven genetically distinct clades of H5N1 viruses have appeared in Vietnam. Clade 2.3.4 viruses existed in Vietnam as early as 2005. Fifteen viruses isolated during 2006 and 2007 belonged to clade 1 and clade 2.3.4, and were divided into five genotypes. Reassortants between the clade 1 and clade 2.3.4 viruses were detected in both North and South Vietnam. We also assessed the replication and pathogenicity of these viruses in mice and found that these isolates replicated efficiently and exhibited distinct virulence in mice. Our results provide important information regarding the diversity of H5N1 viruses in nature.