Acinetobacter baumannii is an emerging human pathogen and a significant cause of nosocomial infections among hospital patients worldwide. The enormous increase in multidrug resistance among hospital isolates and the recent emergence of pan-drug–resistant strains underscores the urgency to understand how A. baumannii evolves in hospital environments. To this end, we undertook a genomic study of a polyclonal outbreak of multidrug-resistant A. baumannii at the research-based National Institutes of Health Clinical Center. Comparing the complete genome sequences of the three dominant outbreak strain types enabled us to conclude that, despite all belonging to the same epidemic lineage, the three strains diverged before their arrival at the National Institutes of Health. The simultaneous presence of three divergent strains from this lineage supports its increasing prevalence in international hospitals and suggests an ongoing adaptation to the hospital environment. Further genomic comparisons uncovered that much of the diversification that occurred since the divergence of the three outbreak strains was mediated by homologous recombination across 20% of their genomes. Inspection of recombinant regions revealed that several regions were associated with either the loss or swapping out of genes encoding proteins that are exposed to the cell surface or that synthesize cell-surface molecules. Extending our analysis to a larger set of international clinical isolates revealed a previously unappreciated ability of A. baumannii to vary surface molecules through horizontal gene transfer, with subsequent intraspecies dissemination by homologous recombination. These findings have immediate implications in surveillance, prevention, and treatment of A. baumannii infections.