West Nile virus (WNV) is a globally distributed arthropod-borne virus (arbovirus) which can cause encephalitis in animals and humans. The strain of WNV in Australia, also referred to as Kunjin virus (WNVKUN), is generally considered less virulent than some of the strains found outside Australia. However, an outbreak of WNVKUN in south-eastern Australia in 2011 caused serious disease in 982 horses. To get a better understanding of the emergence of this more virulent phenotype, 31 isolates collected over a 50 year time-span were collected and their genomes sequenced. These sequence data were combined with existing database entries to perform an analysis of WNVKUN evolution. Fixed amino acid substitutions and time-stamped Bayesian revealed the virus exists as a single long-term lineage across Australia, as suggested by earlier reports. This is consistent with the hypothesis that the virus may form new local clades which circulate for some time, to be replaced from a single reservoir in northern Australia. Most changes occurred in non-conserved regions indicating stochastic events. There were relatively fewer changes in the viral proteins NS3 and NS5 compared to the other viral proteins possibly due to the constraints on viral replication. Two changes previously shown to be associated with increased virulence were found to be present in all strains for over two decades. Hence, the cause and drivers of the more recent virulent strain are still a mystery. To explore phenotypic changes in more detail, a subset of 10 WNVKUN isolates, including the recent pathogenic strain, were used to infect human neuroblastoma cells (SK-N-SH cells), and the induction of genes associated with inflammatory and innate immune responses were measured. The pathogenic strain was found to strongly induce a pro-inflammatory response (IL-8, TNF-α, CCL2 and CXCL2) in the cells, suggesting this may be the basis of its more neuroinvasive phenotype.