The HIV-1 subtype C has spread efficiently in the southern states of Brazil (Rio Grande do Sul, Santa Catarina and Paraná). Phylogeographic studies indicate that the subtype C epidemic in southern Brazil was initiated by the introduction of a single founder virus population at some time point between 1960 and 1980, but little is known about the spatial dynamics of viral spread. A total of 135 Brazilian HIV-1 subtype C pol sequences collected from 1992 to 2009 at the three southern state capitals (Porto Alegre, Florianópolis and Curitiba) were analyzed. Maximum-likelihood and Bayesian methods were used to explore the degree of phylogenetic mixing of subtype C sequences from different cities and to reconstruct the geographical pattern of viral spread in this country region. Phylogeographic analyses supported the monophyletic origin of the HIV-1 subtype C clade circulating in southern Brazil and placed the root of that clade in Curitiba (Paraná state). This analysis further suggested that Florianópolis (Santa Catarina state) is an important staging post in the subtype C dissemination displaying high viral migration rates from and to the other cities, while viral flux between Curitiba and Porto Alegre (Rio Grande do Sul state) is very low. We found a positive correlation (r2 = 0.64) between routine travel and viral migration rates among localities. Despite the intense viral movement, phylogenetic intermixing of subtype C sequences from different Brazilian cities is lower than expected by chance. Notably, a high proportion (67%) of subtype C sequences from Porto Alegre branched within a single local monophyletic sub-cluster. These results suggest that the HIV-1 subtype C epidemic in southern Brazil has been shaped by both frequent viral migration among states and in situ dissemination of local clades.