A newly emerged H7N9 virus has caused 132 human infections with 37 deaths in China since 18 February 2013. Control measures in H7N9 virus–positive live poultry markets have reduced the number of infections; however, the character of the virus, including its pandemic potential, remains largely unknown. We systematically analyzed H7N9 viruses isolated from birds and humans. The viruses were genetically closely related and bound to human airway receptors; some also maintained the ability to bind to avian airway receptors. The viruses isolated from birds were nonpathogenic in chickens, ducks, and mice; however, the viruses isolated from humans caused up to 30% body weight loss in mice. Most importantly, one virus isolated from humans was highly transmissible in ferrets by respiratory droplets. Our findings indicate nothing to reduce the concern that these viruses can transmit between humans.