H7 subtype influenza A viruses, responsible for numerous outbreaks in land-based poultry in Europe and the Americas, have caused over 100 cases of confirmed or presumed human infection over the last decade. The emergence of a highly pathogenic avian influenza H7N3 virus in poultry throughout the state of Jalisco, Mexico, resulting in two cases of human infection, prompted us to examine the virulence of this virus (A/Mexico/InDRE7218/2012 [MX/7218]) and related avian H7 subtype viruses in mouse and ferret models. Several high- and low-pathogenicity H7N3 and H7N9 viruses replicated efficiently in the respiratory tract of mice without prior adaptation following intranasal inoculation, but only MX/7218 virus caused lethal disease in this species. H7N3 and H7N9 viruses were also detected in the mouse eye following ocular inoculation. Virus from both H7N3 and H7N9 subtypes replicated efficiently in the upper and lower respiratory tracts of ferrets; however, only MX/7218 virus infection caused clinical signs and symptoms and was capable of transmission to naive ferrets in a direct-contact model. Similar to other highly pathogenic H7 viruses, MX/7218 replicated to high titers in human bronchial epithelial cells, yet it downregulated numerous genes related to NF-κB-mediated signaling transduction. These findings indicate that the recently isolated North American lineage H7 subtype virus associated with human conjunctivitis is capable of causing severe disease in mice and spreading to naive-contact ferrets, while concurrently retaining the ability to replicate within ocular tissue and allowing the eye to serve as a portal of entry.