Dengue virus (DENV) is a significant public health concern in Colombia, with increased transmission of DENV type 1 (DENV-1) in the departments of Risaralda and Valle del Cauca in the Central-West region of the country following a large outbreak in 2019. However, little is known about the source, genetic diversity, and evolution of circulating viruses. We obtained serum samples from individuals with acute DENV infection and analysed DENV-1 genetic diversity, phylodynamics, and phylogeography. We found that most viruses belonged to DENV-1 genotype V, and phylogenetic analysis revealed three distinct clades, each of which was most closely related to viruses from neighbouring departments of Colombia sampled over the last 5-10 years. Thus, the 2019 outbreak and subsequent DENV-1 circulation was not due to the introduction of a new lineage to the country but rather reflected local DENV-1 V dispersion and evolution. We identified amino acid positions under positive selection in structural proteins and NS1, which may have a role in immune evasion and pathogenesis. Overall, our analysis of DENV-1 V diversity, evolution, and spread within Colombia highlights the important role of genomic surveillance in understanding virus dynamics during endemic circulation and outbreaks.