Kenyan poultry consists of ~80% free-range indigenous chickens kept in small flocks (~30 birds) on backyard poultry farms (BPFs) and they are traded via live bird markets (LBMs). Newcastle disease virus (NDV) was detected in samples collected from chickens, wild farm birds, and other domestic poultry species during a 2017–2018 survey conducted at 66 BPFs and 21 LBMs in nine Kenyan counties. NDV nucleic acids were detected by rRT-PCR L-test in 39.5% (641/1621) of 1621 analyzed samples, of which 9.67% (62/641) were NDV-positive by both the L-test and a fusion-test designed to identify the virulent virus, with a majority being at LBMs (64.5%; 40/62) compared to BPFs (25.5%; 22/62). Virus isolation and next-generation sequencing (NGS) on a subset of samples resulted in 32 complete NDV genome sequences with 95.8–100% nucleotide identities amongst themselves and 95.7-98.2% identity with other east African isolates from 2010-2016. These isolates were classified as a new sub-genotype, V.3, and shared 86.5–88.9% and 88.5–91.8% nucleotide identities with subgenotypes V.1 and V.2 viruses, respectively. The putative fusion protein cleavage site ( 113 R-Q- K-R↓F 117) in all 32 isolates, and a 1.86 ICPI score of an isolate from a BPF chicken that had clinical signs consistent with Newcastle disease, confirmed the high virulence of the NDVs. Compared to genotypes V and VI viruses, the attachment (HN) protein of 18 of the 32 vNDVs had amino acid substitutions in the antigenic sites. A time-scaled phylogeographic analysis suggests a west-to-east dispersal of the NDVs via the live chicken trade, but the virus origins remain unconfirmed due to scarcity of continuous and systematic surveillance data. This study reveals the widespread prevalence of vNDVs in Kenyan backyard poultry, the central role of LBMs in the dispersal and possibly generation of new virus variants, and the need for robust molecular epidemiological surveillance in poultry and non-poultry avian species.