Epizootics of Venezuelan equine encephalitis (VEE) involving subtype IAB viruses occurred sporadically in South, Central and North America from 1938 to 1973. Incompletely inactivated vaccines have long been suspected as a source of the later epizootics. We tested this hypothesis by sequencing the PE2 glycoprotein precursor (1,677 nucleotides) or 26S/nonstructural protein 4 (nsP4) genome regions (4,490 nucleotides) for isolates representing most major outbreaks. Two distinct IAB genotypes were identified: 1) 1940s Peruvian strains and 2) 1938-1973 isolates from South, Central, and North America. Nucleotide sequences of these two genotypes differed by 1.1%, while the latter group showed only 0.6% sequence diversity. Early VEE virus IAB strains that were used for inactivated vaccine preparation had sequences identical to those predicted by phylogenetic analyses to be ancestors of the 1960s-1970s outbreaks. These data support the hypothesis of a vaccine origin for many VEE outbreaks. However, continuous, cryptic circulation of IAB viruses cannot be ruled out as a source of epizootic emergence.