Abstract Background Recurring dengue outbreaks occur in cyclical pattern in most endemic countries. The recurrences of dengue virus (DENV) infection predispose the population to increased risk of contracting the severe forms of dengue. Understanding the DENV evolutionary mechanism underlying the recurring dengue outbreaks has important implications for epidemic prediction and disease control. Results We used a set of viral envelope (E) gene to reconstruct the phylogeny of DENV-1 isolated between the periods of 1987–2011 in Malaysia. Phylogenetic analysis of DENV-1 E gene revealed that genotype I virus clade replacements were associated with the cyclical pattern of major DENV-1 outbreaks in Malaysia. A total of 9 non-conservative amino acid substitutions in the DENV-1 E gene consensus were identified; 4 in domain I, 3 in domain II and 2 in domain III. Selection pressure analyses did not reveal any positively selected codon site within the full length E gene sequences (1485 nt, 495 codons). A total of 183 (mean dN/dS = 0.0413) negatively selected sites were found within the Malaysian isolates; neither positive nor negative selection was noted for the remaining 312 codons. All the viruses were cross-neutralized by the respective patient sera suggesting no strong support for immunological advantage of any of the amino acid substitutions. Conclusion DENV-1 clade replacement is associated with recurrences of major DENV-1 outbreaks in Malaysia. Our findings are consistent with those of other studies that the DENV-1 clade replacement is a stochastic event independent of positive selection.