Klebsiella pneumoniae clonal group (CG) 258, comprising sequence types (STs) 258, 11, and closely related variants, is associated with dissemination of the K. pneumoniae carbapenemase (KPC). Hospital outbreaks of KPC CG258 infections have been observed globally and are very difficult to treat. As a consequence, there is renewed interest in alternative infection control measures such as vaccines and phage or depolymerase treatments targeting the K. pneumoniae polysaccharide capsule. To date, 78 immunologically distinct capsule variants have been described in K. pneumoniae. Previous investigations of ST258 and a small number of closely related strains suggested that capsular variation was limited within this clone; only two distinct ST258 capsule polysaccharide synthesis (cps) loci have been identified, both acquired through large-scale recombination events (>50 kb). In contrast to previous studies, we report a comparative genomic analysis of the broader K. pneumoniae CG258 (n = 39). We identified 11 different cps loci within CG258, indicating that capsular switching is actually common within the complex. We observed several insertion sequences (IS) within the cps loci, and show further intraclone diversification of two cps loci through IS activity. Our data also indicate that several large-scale recombination events have shaped the genomes of CG258, and that definition of the complex should be broadened to include ST395 (also reported to harbor KPC). As only the second report of extensive intraclonal cps variation among Gram-negative bacterial species, our findings alter our understanding of the evolution of these organisms and have key implications for the design of control measures targeting K. pneumoniae capsules.