Bangladesh has been severely hit by highly pathogenic avian influenza H5N1 (HPAI-H5N1). However, little is known about the genetic diversity and the evolution of the circulating viruses in Bangladesh. In the present study, we analyzed the hemagglutinin gene of 30 Bangladeshi chicken isolates from 2007 through 2010. We analyzed the polybasic amino acid sequence motif of the cleavage site and amino acid substitution pattern. Phylogenetic history was reconstructed using neighbor-joining and Bayesian time-scaled methods. In addition, we used Mantel correlation tests to analyze the relation between genetic relatedness and spatial and temporal distances. Neighbor-joining phylogeography revealed that virus circulating in Bangladesh from 2007 through 2010 belonged to clade 2.2. The results suggest that clade 2.2 viruses are firmly entrenched and have probably become endemic in Bangladesh. We detected several amino acid substitutions, but they are not indicative of adaptation toward human infection. The Mantel correlation test confirmed significant correlation between genetic distances and temporal distances between the viruses. The Bayesian tree shows that isolates from waves 3 and 4 derived from a subgroup of isolates from the previous waves grouping with a high posterior probability (pp=1.0). This indicates the possibility of formation of local subclades. One surprising finding of spatio-temporal analysis was that genetically identical virus caused independent outbreaks over a distance of more than 200km and within 14 days of each other. This might indicate long distance dispersal through vectors such as migratory birds and vehicles, and challenges the effectiveness of movement restriction around 10km radius of an outbreak. The study indicates possible endemicity of the clade 2.2 HPAI-H5N1 virus in Bangladesh. Furthermore, the formation of a subclade capable of transmission to humans cannot be ruled out. The findings of this study might provide valuable information for future surveillance, prevention and control programme.