Polyomavirus BK is a recognized cause of nephropathy and hemorrhagic cystitis in kidney or allogeneic hematopoietic stem cell transplant recipients. This study explored a role of genetic variations in capsid protein VP-1 gene as a factor in viral pathogenesis. VP-1 was amplified from 7 healthy subjects with viruria, 7 transplant patients with viruria, and 11 patients with viremia or nephropathy. PCR products were cloned and a total of 558 clonal sequences were subjected to phylogenetic analysis using standard methods. VP-1 quasispecies were found in 25/25 and coinfection with different genotypes in 12/25 subjects. Genotype II was found as an unexpected minority species in 5/25 individuals. Recombinant strains of uncertain biologic significance, which frequently contained genotype II and IV sequences were identified in 9/25 subjects. Viremia/nephropathy group was characterized by (a) greater sequence complexity in whole VP-1 versus BC loop and BC loop compared to the HI loop, (b) greater intra-strain genetic diversity in the BC loop compared to whole VP-1 protein and HI loop, (c) more non-synonymous substitutions (dN) in the BC loop compared to whole VP-1 and HI loop, (e) fewer synonymous substitutions (dS) compared to healthy-viruria group, and (f) selection pressure (dN/dS >1.0) exerted on VP-1. In conclusion, this study documents frequent occurrence of quasispecies in a host DNA polymerase dependent virus, which is theoretically expected to show high replication fidelity. Quasispecies occur even in healthy subjects with viruria, but evolutionary selection pressure directed at the viral capsid protein (VP-1) is seen only in patients with viremia or nephropathy. J. Med. Virol. 84:152–161, 2011. © 2011 Wiley Periodicals, Inc.