There has been multiple evidence that domestic poultry may act as a vessel for the generation of novel influenza A viruses. In this study, we have analyzed the evolution and pathogenicity of 4 H5N2 avian influenza viruses isolated from apparently healthy poultry from H5N1 virus endemic areas in China. Phylogenetic analysis revealed that two of these viruses, A/duck/Eastern China/1111/2011 (DK/EC/1111/11) and A/goose/Eastern China/1112/2011 (GS/EC/1112/11) were derived from reassortment events in which clade 2.3.4 highly pathogenic avian influenza (HPAI) H5N1 viruses acquired novel neuraminidase and nonstructural protein genes. Another two isolates, A/chicken/Hebei/1102/2010 (CK/HB/1102/10) and A/duck/Hebei/0908/2009 (DK/HB/0908/09), possess hemagglutinin (HA) gene belong to clade 7 H5 viruses and other genes from endemic H9N2 viruses, or from viruses of various subtypes of the natural gene pool. All of these H5N2 isolates bear characteristic sequences of HPAI virus at the cleavage site of HA, and animal experiments indicated that all of these viruses but DK/HB/0908/09 is highly pathogenic to chickens. In particular, DK/EC/1111/11 and GS/EC/1112/11 are also highly pathogenic to ducks and moderately pathogenic to mice. All of these 4 viruses were able to replicate in domestic ducks and mice without prior adaptation. The emergence of these novel H5N2 viruses adds more evidence for the active evolution of H5 viruses in Asia. The maintenance of the highly pathogenic phenotype of some of these viruses even after reassortment with a new NA subtypes, their ability to replicate and transmit in domestic poultry, and the pathogenicity in the mammalian mouse model, highlight the potential threat posed by these viruses to both veterinary and public health.