Low-pathogenicity avian influenza (LPAI) subtype H7N3 was diagnosed on a two-age broiler breeder farm in Abbotsford, British Columbia (BC), in early February 2004. The presenting complaint in the older index flock was feed refusal, with 0.5% mortality over 72 hr that resolved over the following week Ten days after the initial complaint in the index flock, a younger flock in an adjacent barn experienced an abrupt spike in mortality (25% in 48 hr). The gross lesions of tracheal hyperemia and hilar pulmonary consolidation were subtle and nonspecific, and the diagnosis of avian influenza required laboratory confirmation. Two different viruses were isolated from the index farm: a LPAI (H7N3) was isolated from the older flock and a high-pathogenicity avian influenza (HPAI) (H7N3), which had an additional 21 base insertion at the hemagglutinin-cleavage site, was isolated from the younger flock. The presence of this insertion sequence and the similarity of adjacent sequences indicate that the LPAI had mutated into HPAI at some point between the first and second barn. Despite enhanced on-farm biosecurity measures, the virus was not contained on the index farm and eventually spread to over 40 commercial poultry facilities before massive depopulation efforts enabled its eradication.