In June of 2012, a H7N3 highly pathogenic avian influenza (HPAI) virus was identified as the cause of a severe disease outbreak in commercial laying chicken farms in Mexico. The purpose of this study was to characterize the Mexican 2012 H7N3 HPAI virus (A/chicken/Jalisco/CPA1/2012) and determine protection conferred against the virus by different H7 inactivated vaccines in chickens. Both adult and young chickens intranasally inoculated with the virus became infected and died between 2 and 4 days post inoculation. High virus titers and viral replication in many tissues was demonstrated at 2 days p.i. in infected birds. The Jalisco virus had high sequence similarity of greater than 97% to wild bird viruses from North America in all eight gene segments. The hemagglutinin gene of the virus contained a 24 nucleotide insert at the hemagglutinin cleavage site which had a 100% sequence identity to chicken 28s ribosomal RNA, suggesting the insert was non-homologous recombination with the host genome. For vaccine protection studies, both U.S. H7 low pathogenic (LP) AI viruses and a 2006 Mexican H7 LPAI virus were tested as antigen in experimental oil emulsion vaccines and injected into chickens three weeks prior to challenge. All H7 vaccines tested provided ≥90 % protection against clinical disease after challenge and decreased the number of birds shedding and the titers of viral shedding. This study demonstrates the pathological consequence of the 2012 Mexican lineage H7N3 HPAI infection of chickens and provides support for effective vaccination programs in poultry against this virus.