Acinetobacter baumannii is a globally important nosocomial pathogen characterized by an increasing incidence of multidrug resistance. Routes of dissemination and gene flow among health care facilities are poorly resolved and are important for understanding the epidemiology of A. baumannii, minimizing disease transmission, and improving patient outcomes. We used whole-genome sequencing to assess diversity and genome dynamics in 49 isolates from one United States hospital system during one year from 2007 to 2008. Core single-nucleotide-variant-based phylogenetic analysis revealed multiple founder strains and multiple independent strains recovered from the same patient yet was insufficient to fully resolve strain relationships, where gene content and insertion sequence patterns added additional discriminatory power. Gene content comparisons illustrated extensive and redundant antibiotic resistance gene carriage and direct evidence of gene transfer, recombination, gene loss, and mutation. Evidence of barriers to gene flow among hospital components was not found, suggesting complex mixing of strains and a large reservoir of A. baumannii strains capable of colonizing patients.Genome sequencing was used to characterize multidrug-resistant Acinetobacter baumannii strains from one United States hospital system during a 1-year period to better understand how A. baumannii strains that cause infection are related to one another. Extensive variation in gene content was found, even among strains that were very closely related phylogenetically and epidemiologically. Several mechanisms contributed to this diversity, including transfer of mobile genetic elements, mobilization of insertion sequences, insertion sequence-mediated deletions, and genome-wide homologous recombination. Variation in gene content, however, lacked clear spatial or temporal patterns, suggesting a diverse pool of circulating strains with considerable interaction between strains and hospital locations. Widespread genetic variation among strains from the same hospital and even the same patient, particularly involving antibiotic resistance genes, reinforces the need for molecular diagnostic testing and genomic analysis to determine resistance profiles, rather than a reliance primarily on strain typing and antimicrobial resistance phenotypes for epidemiological studies.