Avian-origin H3N2 canine influenza virus (CIV) is one of the most prevalent influenza virus subtypes in dogs worldwide. Previous studies have shown that during the evolution of H3N2 CIV in dogs, its adaptability in mammals increased gradually, suggesting that dogs can serve as a potential intermediate host for cross-species transmission of the avian influenza virus. In this study, we report results from the surveillance and characterization of H3N2 CIVs isolated from animal hospitals and kennels in 2021 in China. We characterized the CIVs’ genetic and antigenic variation, receptor-binding specificity, and virulence in mice. The hemagglutinin (HA) phylogenetic result showed that these H3N2 CIVs belonged to Clade 5.1, a clade formed after 2019. Compared to the 2016–2019 strains in China, the 2021 H3N2 CIVs had similar antigenicity and receptor-binding specificity. The pathogenicity in mice was significantly reduced after infection with two 2021 strains, but the replication capacity was similar, suggesting that a virus-host balance might have been established. This report emphasizes the importance of close surveillance and monitoring of H3N2 CIVs in dogs to prevent the emergence of novel influenza viruses with public health threats.