Avian reovirus (ARV) is a disease agent that causes economic losses in the poultry industry. The available vaccines do not confer full protection. One possible reason is the existence in the field of many virulent serotypes with no cross protection. Several ARV strains have been isolated in Israel in the last few years. In this study, we investigated the diversity of the sigma C protein of ARV because this is the most variable protein in the virus and it induces the production of neutralizing antibodies. Sigma C from two virulent isolates was sequenced, cloned, and expressed. The protein sequence differed from the attenuated vaccine strain (strain 1133) but was similar to a U.S. virulent strain (strain 1733). Those differences led to a change in the antigenic index of the protein, mainly at three sites. Sera of infected birds in a field trial and of birds in a controlled experiment vaccinated with the recombinant sigma C protein showed high titers in enzyme-linked immunosorbent assay to the recombinant protein and lower titers to the attenuated vaccine strain. This means that sigma C can be used as a diagnostic tool for the detection of antibodies relevant for protection and in the future as a subunit vaccine. The results of this study highlight the need to reconsider vaccinations against ARV in terms of the strains to be used and of the method of identifying protective antibodies transferred to progeny.