Significance: Our study used a phylodynamic model incorporating geographical and host structure to uncover critical information about the transmission dynamics of H7N9 virus in China including the number, geographic direction, and timing of new infections. By employing a Bayesian phylodynamic approach, we emphasize the significance of integrating epidemiological and genetic data to assess the epidemic state and inform future surveillance efforts for both public and animal health. Our findings highlight the importance of leveraging phylodynamic analyses to better understand and respond to emerging infectious diseases. Abstract: In 2013 to 2017, avian influenza A(H7N9) virus has caused five severe epidemic waves of human infections in China. The role of live bird markets (LBMs) in the transmission dynamics of H7N9 remains unclear. Using a Bayesian phylodynamic approach, we shed light on past H7N9 transmission events at the human–LBM interface that were not directly observed using case surveillance data-based approaches. Our results reveal concurrent circulation of H7N9 lineages in Yangtze and Pearl River Delta regions, with evidence of local transmission during each wave. Our results indicate that H7N9 circulated in humans and LBMs for weeks to months before being first detected. Our findings support the seasonality of H7N9 transmission and suggest a high number of underreported infections, particularly in LBMs. We provide evidence for differences in virus transmissibility between low and highly pathogenic H7N9. We demonstrate a regional spatial structure for the spread of H7N9 among LBMs, highlighting the importance of further investigating the role of local live poultry trade in virus transmission. Our results provide estimates of avian influenza virus (AIV) transmission at the LBM level, providing a unique opportunity to better prepare surveillance plans at LBMs for response to future AIV epidemics.