The evolution of dengue virus (DENV) is characterized by phylogenetic trees that have a strong temporal structure punctuated by dramatic changes in clade frequency. To determine the cause of these large-scale phylogenetic patterns, we examined the evolutionary history of DENV serotype 1 (DENV-1) and DENV-3 in Thailand, where gene sequence and epidemiological data are relatively abundant over a 30-year period. We found evidence for the turnover of viral clades in both serotypes, most notably in DENV-1, where a major clade replacement event took place in genotype I during the mid-1990s. Further, when this clade replacement event was placed in the context of changes in serotype prevalence in Thailand, a striking pattern emerged; an increase in DENV-1 clade diversity was associated with an increase in the abundance of this serotype and a concomitant decrease in DENV-4 prevalence, while clade replacement was associated with a decline in DENV-1 prevalence and a rise of DENV-4. We postulate that intraserotypic genetic diversification proceeds at times of relative serotype abundance and that replacement events can result from differential susceptibility to cross-reactive immune responses.