The H7N9 avian influenza virus (AIV) that emerged in China have caused five waves of human infection. Further human cases have been successfully prevented since September 2017 through the use of an H7N9 vaccine in poultry. However, the H7N9 AIV has not been eradicated from poultry in China, and its evolution remains largely unexplored. In this study, we isolated 19 H7N9 AIVs during surveillance and diagnosis from February 2018 to December 2019, and genetic analysis showed that these viruses have formed two different genotypes. Animal studies indicated that the H7N9 viruses are highly lethal to chicken, cause mild infection in ducks, but have distinct pathotypes in mice. The viruses bound to avian-type receptors with high affinity, but gradually lost their ability to bind to human-type receptors. Importantly, we found that H7N9 AIVs isolated in 2019 were antigenically different from the H7N9 vaccine strain that was used for H7N9 influenza control in poultry, and that replication of these viruses cannot, therefore, be completely prevented in vaccinated chickens. We further revealed that two amino acid mutations at positions 135 and 160 in the HA protein added two glycosylation sites and facilitated the escape of the H7N9 viruses from the vaccine-induced immunity. Our study provides important insights into H7N9 virus evolution and control.