Influenza B viruses cause substantial respiratory disease and seasonal outbreaks. Despite decades of circulation in humans, only the B/Victoria lineage persisted after the COVID-19 pandemic. Continual evolution has generated hemagglutinin deletion variants at residues 162-164 that drive successive epidemics, yet their functional consequences remain poorly understood. Using integrated phylodynamics and reverse genetics, we show that Clade V1A.1 viruses carrying a two-amino acid deletion exhibit enhanced replication and increased virulence compared with ancestral viruses lacking deletions. The recently prevailing Clade V1A.3, which harbors a three-amino acid deletion together with the K136E substitution, has completely displaced V1A.1 and causes more severe disease in mice. Both clades bound efficiently to alpha 2-3 and 2-6 sialylated glycans and exhibited broad tolerance to acidic pH and elevated temperatures. These findings reveal that specific combinations of HA deletions and substitutions confer pronounced fitness advantages to emerging variants, driving global selective sweeps, evolutionary success and long-term persistence of B/Victoria lineage, and posing challenges for vaccine efficacy and influenza control.