The highly pathogenic avian influenza H5N1 2.3.4.4b clade virus has caused widespread outbreaks across South America, primarily affecting seabirds, poultry, and marine mammals. The virus likely reached the continent through migratory birds from North America, initially spreading along the Pacific coast before advancing into Atlantic-bordering countries such as Argentina, Uruguay, and Brazil. This study investigated the dynamics of H5N1 strains in Uruguay during outbreaks from February and October 2023. We analyzed an updated South American database, including a newly sequenced viral genome from a royal tern (Thalasseus maximus) collected at the end of the outbreaks. Phylogeographic reconstruction revealed two distinct South American phylogroups comprising Uruguayan strains: one mainly driven by wild birds and poultry, with the royal tern strain clustering with Brazilian isolates, and another primarily associated with marine mammals, displaying adaptive residues in the PB2 protein. In Uruguay, these phylogroups delineate two main transmission routes: (i) an avian-derived pathway originating in Argentina and (ii) a pinniped-derived route from Chile. Brazil, initially colonized via the Argentine route, later emerged as a secondary source for Uruguay. This host-pathway interplay underscores the virus’s cross-species potential and highlights the need for coordinated regional surveillance within a One Health framework to mitigate zoonotic risks.