In 2004, a low pathogenic H5N2 influenza virus (A/parrot/CA/6032/04) was identified in a psittacine bird for the first time in the United States. Sequence and phylogenetic analysis of the hemagglutinin gene grouped the parrot isolate under the Mexican lineage H5N2 viruses (subgroup B) with highest similarity to recent chicken-origin isolates from Guatemala. Antigenic analysis further confirmed the close relatedness of the parrot isolate to Mexican lineage viruses, the highest cross-reactivity being demonstrated to Guatemala isolates. In vivo studies of the parrot isolate in chickens, ducks and turkeys showed that the virus, though did not cause any clinical signs, could replicate to high titers in these birds and efficiently transmit to contact control cage mates. The possibility that the parrot harboring the virus was introduced into the United States as a result of illegal trade across the border provides additional concern for the movement of foreign animal diseases from neighboring countries. Considering the potential threat of the virus to domestic poultry, efforts should be continued to prevent the entry and spread of influenza viruses by imposing effective surveillance and monitoring measures.