The Mexican lineage H7N3 highly pathogenic avian influenza virus (HPAIV) has persisted in Mexican poultry since its first isolation in 2012. To date, the detection of this virus has gradually expanded from the initial one state to 18 states in Mexico. Despite the HPAIV H7N3 outbreak occurring yearly, the transmission pathways have never been studied, disallowing the establishment of effective control measures. We used a phylogenetic approach to unravel the transmission pathways of 2022 H7N3 HPAIVs in the new outbreak areas in Northern Mexico. We present genetic data of H7N3 viruses produced from 18 poultry farms infected in the spring of 2022. Our results indicate that the virus responsible for the current outbreak in Northern Mexico evolved from the Mexican lineage H7N3 HPAIV discovered in 2012. In the current outbreak, we identified five clusters of infection with four noticeably different genetic backgrounds. It is a cluster IV-like virus that was transmitted into one northern state causing an outbreak, then spreading to another neighboring northern state, possibly via a human-mediated mechanical transmission mechanism. The long-distance transmission event highlights the necessity for the more rigorous enforcement of biosafety measures in outbreaks. Additionally, we examined the evolutionary processes shaping the viral genetic and antigenic diversities. It is imperative to enhance active surveillance to include birds, the environment, and humans to detect HPAI in domestic poultry at an earlier point and eliminate it.