After the Zika virus (ZIKV) epidemic in the Americas in 2016, both Zika and dengue incidence declined to record lows in many countries in 2017-2018, but in 2019 dengue resurged in Brazil, causing ~2.1 million cases. In this study we use epidemiological, climatological and genomic data to investigate dengue dynamics in recent years in Brazil. First, we estimate dengue virus force of infection (FOI) and model mosquito-borne transmission suitability since the early 2000s. Our estimates reveal that DENV transmission was low in 2017-2018, despite conditions being suitable for viral spread. Our study also shows a marked decline in dengue susceptibility between 2002 and 2019, which could explain the synchronous decline of dengue in the country, partially as a result of protective immunity from prior ZIKV and/or DENV infections. Furthermore, we performed phylogeographic analyses using 69 newly sequenced genomes of dengue virus serotype 1 and 2 from Brazil, and found that the outbreaks in 2018-2019 were caused by local DENV lineages that persisted for 5-10 years, circulating cryptically before and after the Zika epidemic. We hypothesize that DENV lineages may circulate at low transmission levels for many years, until local conditions are suitable for higher transmission, when they cause major outbreaks.